International Journal of Social Sciences and Humanities Reviews Vol.14 No.1, January 2024; p. 11 – 19 (ISSN: 2276-8645) 11 RISK EXPOSURE AND THE PERFORMANCE OF MANUFACTURING FIRMS IN NIGERIA SUNDAY ADEKUNLE ADULOJU Ph.D a , OLAJIDE SOLOMON FADUN Ph.D b , ADEDEJI VISCKER OSASONA c a Department of Actuarial Science and Insurance, Faculty of Management Sciences, University of Lagos, Akoka, Lagos State, Nigeria. b Department of Actuarial Science and Insurance, Faculty of Management Sciences, University of Lagos, Akoka, Lagos State, Nigeria. c Insurance and Risk Management Unit, Department of Finance, Faculty of Management Sciences, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria. Correspondence author: Adedeji Viscker Osasona, adedeji.osasona@eksu.edu.ng, +2348066648393. Adedeji Viscker Osasona: https://orcid.org/0009-0009-4061-975X Abstract Background: The performance of a sample of manufacturing enterprises was measured in terms of return on assets, and this study looked at the impact of exposure to credit risk, liquidity risk, and interest rate exposure. Objective: The aim of this study is to examine how risk exposure affects the productivity of manufacturing companies in Nigeria. The specific objectives of this study are to examine the effect of credit risk exposure on return on asset of manufacturing firms, investigate the effect of liquidity risk exposure on return on asset of manufacturing firms and assess the effect of interest risk exposure on return on asset of manufacturing firms in Nigeria Method: This study employs inferential and descriptive analysis, using metrics like mean, minimum and maximum value, kurtosis, skewness, and Jacque bera for descriptive analysis. Inferential analytic approaches include correlation analysis and panel regression estimation. Panel regression estimation was chosen to determine if heterogeneity affects the influence of risk exposure on performance, a feature not found in previous studies. Results: Results showed that exposure to credit risk and liquidity risk positively affected return on assets, while interest rate risk exposure had a negative effect. However, credit risk exposure was the only factor significantly affecting the return on assets of the chosen enterprises. The study concluded that manufacturing firms' exposure to risk, particularly credit risk exposure, significantly affects performance. Conclusion: To improve performance, the study suggested that manufacturing enterprises should be exposed to a certain level of risk related to debtors and creditors. Keywords: Credit risk, Interest rate; Liquidity risk; Manufacturing Firms; Performance. 1. Introduction Since no business works without the assumption and possibility of uncertainty, risk exposure is essential for any business organization, in particular manufacturing-based companies, which are a vital part of an expanding economy (Kanga & Achoko, 2016). Risk is the probability of occurrence, deviation in the expected positive outcome or returns from business processes and activities (Ogunlami & Maroof, 2021). The fact that a business organization has been established means the founder or business owner(s) had accepted to take the risk involved in the business establishment and operations, even with the possibility of having occurrence of some risks which are not intended or expected. For any businesses to achieve goals and objectives it must also be involved in activities and processes with greater returns but these activities and processes oftentimes are associated with greater possibility of loss which may occur with any deviation from the right projections for objective maximization (Ayeni & Emeka, 2021). Risk exposure had been given greater attention by scholar, researchers and business organizations across countries of the world, including Nigeria.