FINANCIAL RESILIENCE UNDER CLIMATE RISK: MODERATING EFFECTS OF ENVIRONMENTAL EXPOSURE ON PERFORMANCE OF AGRICULTURAL ENTERPRISES IN NIGERIA

Abstract

This study investigates the moderating role of climate sensitivity on the relationship between firm-specific characteristics and financial performance among listed agricultural firms in Nigeria over the period 2014–2023. Using panel data from ten firms and employing a Generalized Least Squares (GLS) random effects model, the analysis explores how climate-related variations influence the impact of leverage, growth opportunity, complexity, liquidity, firm size, and firm age on return on assets. Results reveal that while climate sensitivity independently does not significantly influence financial performance, it significantly moderates the effect of liquidity on profitability, indicating heightened vulnerability to climatic shocks in firms with weaker liquidity profiles. The findings underscore the necessity for adaptive financial strategies in agribusiness, especially under Nigeria‘s climate volatility. The study contributes to the discourse on environmental-financial integration by offering empirical insights for policymakers, investors, and corporate managers in climate-sensitive economies. Limitations include the sectoral scope and data availability, with future research encouraged to explore multi- sectoral analyses and incorporate climate adaptation indices.