-
Do Macroeconomic Variables Predict Deposit Money Banks’ Performance in Nigeria
Ejem Chukwu Agwu,
Ogbonna Udochukwu Godfrey,
Ogbulu Onyemachi Maxwell
Issue:
Volume 5, Issue 3, September 2020
Pages:
118-130
Received:
25 May 2020
Accepted:
8 June 2020
Published:
16 June 2020
Abstract: This study investigated the relationship between macroeconomic variables and the performance of deposit money banks in Nigeria is incited by the heated arguments of finance and economic researchers’ on whether macroeconomic variables; Gross Domestic Product rate, interest rate, inflation rate, money supply and exchange rate are or not in control of the banks’ management banking sector. Based on that, researchers in this study want to take a solid position on whether macroeconomic variables positively or negatively or of no effect on the performance of deposit money banks (DMBs) in Nigeria. The study made use of suitable finametrica tools to analyze the models. The results of the Error Correction Model and General Method Moments results that all the macroeconomic variables employed (economic growth rate, interest rate, inflation rate, money supply and exchange rate in this study have no significant relationship with bank performance. VECG ranger Causality/Block Exogeneity Wald Test observed that each and jointly, the macroeconomic variables do not cause bank performance both in the short run and long run. Again, impulse response result revealed that bank performance responds insignificantly to the shocks of all the macroeconomic variables. Consequently the researchers advocate that deposit money banks in Nigeria within herent discretionary policy be proactive to the monetary and fiscal policies of regulatory authorities in order to enhance their performance.
Abstract: This study investigated the relationship between macroeconomic variables and the performance of deposit money banks in Nigeria is incited by the heated arguments of finance and economic researchers’ on whether macroeconomic variables; Gross Domestic Product rate, interest rate, inflation rate, money supply and exchange rate are or not in control of...
Show More
-
Efficient Market Hypotheses Controversy and Nigerian Stock Exchange Relations
Ejem Chukwu Agwu,
Ogbonna Udochukwu Godfrey,
Okpara Godwin Chigozie
Issue:
Volume 5, Issue 3, September 2020
Pages:
131-140
Received:
25 May 2020
Accepted:
8 June 2020
Published:
28 June 2020
Abstract: The endless arguments on which Efficient Market Hypotheses form Nigeria Stock exchange (NSE) belongs incited this study; Efficient Market Hypotheses controversy and Nigerian Stock Exchange Relations. In order to achieve the aim of this study, the All Share Index (ASI) with daily data from January 02, 2014 to May 20, 2019 (1333 observations) and annual data from 1985 to 2018 (34 observations) collected from the Nigeria Stock Market fact books. The study employed three analytical methods namely the unit root test, GARCH Model and the Autocorrelation cum patial autocorrelation method for the assessment of weak form hypothesis on the daily and annual all share index in the Nigerian Stock market. The results of these evaluations indicated a significant relationship between the price series and their lagged values implying that stock price series do not follow a random walk process in Nigerian stock market. Thus, affirming that the Nigeria Stock Exchange is not efficient in weak form. In the light of this, the researchers recommend that the supervisory and regulatory authorities should strengthen the Nigerian Stock Market through palliating its regulations pertaining to transparency of information management rules such as market barriers and stringent listing requirement, publication of accounts, notices of annual general meeting and the like.
Abstract: The endless arguments on which Efficient Market Hypotheses form Nigeria Stock exchange (NSE) belongs incited this study; Efficient Market Hypotheses controversy and Nigerian Stock Exchange Relations. In order to achieve the aim of this study, the All Share Index (ASI) with daily data from January 02, 2014 to May 20, 2019 (1333 observations) and ann...
Show More
-
Insurance Specific Risk and Profitability: Evidence from Nigerian Insurance Firms
Ibrahim Mallam Fali,
Terzungwe Nyor,
Lateef Olumide Mustapha
Issue:
Volume 5, Issue 3, September 2020
Pages:
141-148
Received:
4 June 2020
Accepted:
20 June 2020
Published:
4 July 2020
Abstract: Insurance firms assume different types of business-specific risks that affect financial operations. The study therefore investigates the effect of these insurance specific risks on profitability in Nigeria over the 10-year period (2009-2018) with a sample size of 19 firms. Three variables, such as Re-insurance, Technical Provisions and Underwriting Risks, have been used as a measure of insurance specific risk for independent variables. The net profit margin was used as a measure of profitability for the dependent variable. The study is based on the Ex-Post Facto Research Design, which uses data already collected for the study. The study used secondary data from their annual reports. The results of the fixed effect regression model showed that the technical provision and the underwriting ricks had a negative and significant impact on profitability, while the re-insurance risk had a negative and insignificant impact on profitability. The study concludes that an increase in technical provision and risk underwriting will lead to a poor profitability of the insurance companies listed in Nigeria. The study recommends that insurance companies in Nigeria should make sufficient provision for outstanding claims by conducting an adequate assessment of their liabilities and also taking into account past experience to develop a comprehensive procedure for effectively monitoring and controlling their outstanding claims.
Abstract: Insurance firms assume different types of business-specific risks that affect financial operations. The study therefore investigates the effect of these insurance specific risks on profitability in Nigeria over the 10-year period (2009-2018) with a sample size of 19 firms. Three variables, such as Re-insurance, Technical Provisions and Underwriting...
Show More
-
Government Expenditure and Education Sub-sector Development in Nigeria: An Empirical Investigation
Stephen Ebhodaghe Ughulu,
Stella Eghoikhunu Ughulu
Issue:
Volume 5, Issue 3, September 2020
Pages:
149-156
Received:
2 December 2019
Accepted:
27 March 2020
Published:
4 August 2020
Abstract: This paper examined empirically the impact of government expenditure on the education sub-sector development in Nigeria for the period 1980 to 2017. Government expenditure was decomposed into capital and recurrent expenditures, while education sub-sector development was viewed from the perspectives of the States and Local Governments dependence (FDR), fiscal concentration (FCR), and per capita income (PCI). The data of the study were obtained from both the National Bureau of Statistics and the Central Bank of Nigeria Statistical Bulletins. The fully modified ordinary least squares (FMOLS) approach of the econometrics was used to estimate the findings/results of the paper. Some of the major findings of the paper indicated that all the variables became stationary after first differencing and that the series for all the equations were cointegrated thereby suggesting the existence of long run relationships among the variables. The short run dynamics results were robust and impressive given that each of the coefficients of determination (R-squared) and their adjusted counterparts were quite high. Furthermore, the results indicated that while capital expenditure exerted negative impact on the education sub-sector development, recurrent expenditure displayed a positive impact on the sub-sector. The paper therefore recommends that government, as a matter of frantic efforts and deliberate policies, scales up its capital expenditure on education sub-sector development as well as intensifying capacity building that would engender qualitatively improved education service delivery. This would only be possible if urgent institutional frameworks, procedures and governance styles that accord with international standards are urgently introduced and implemented.
Abstract: This paper examined empirically the impact of government expenditure on the education sub-sector development in Nigeria for the period 1980 to 2017. Government expenditure was decomposed into capital and recurrent expenditures, while education sub-sector development was viewed from the perspectives of the States and Local Governments dependence (FD...
Show More
-
Banks Financing and Industrial Sector Performance in Nigeria
Akinwumi Olusegun Akinola,
Omotayo Olubunmi Efuntade,
Alani Olusegun Efuntade
Issue:
Volume 5, Issue 3, September 2020
Pages:
157-166
Received:
22 July 2020
Accepted:
19 August 2020
Published:
27 August 2020
Abstract: This paper examined the effect of banks financing on industrial sector growth in Nigeria. The objectives of the Study were to examine the effects of domestic money supply, banks credit and maximum bank lending rate on industrial sector performance in Nigeria. The Study is established on Bank-based monetary framework on the grounds that the hypothesis focuses on the positive functions of banks in industrial growth and development. Descriptive and Ex-post facto research designs were adopted to investigate the contribution of various bank financing variables to industrial sector growth measured by manufacturing sector output in Nigeria over a period of 15 years (2004-2018). Method of analysis was the linear regression model using fully modified ordinary least square model to estimate the individual effects of banks financing variables measured by banks credits, domestic money supply, and maximum bank lending rate on industrial sector growth measured by manufacturing sector output. The study revealed that industrial sector growth is strongly impacted upon by banks credits, domestic money supply, and maximum bank lending rate. The study concluded that, there is positive significant relationship between bank credits, domestic money supply and growth in the industrial sector. Therefore, the study recommended that, banks should continue to support the industrial sector through credit borrowing, this way, the dwindling nature of Nigeria industrial sector can be redressed through adequate credits provided by these banks. However, these credits should be given at lower interest rate.
Abstract: This paper examined the effect of banks financing on industrial sector growth in Nigeria. The objectives of the Study were to examine the effects of domestic money supply, banks credit and maximum bank lending rate on industrial sector performance in Nigeria. The Study is established on Bank-based monetary framework on the grounds that the hypothes...
Show More
-
Influence of Financial Performance and Financial Leverage on Dividend Payout
Solomon Munyoki Kathuo,
Oluoch Oluoch,
Agnes Njeru
Issue:
Volume 5, Issue 3, September 2020
Pages:
167-173
Received:
19 August 2020
Accepted:
4 September 2020
Published:
16 September 2020
Abstract: This study explored the influence of financial performance and financial leverage on Deposit-Taking Saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members consistently. Many of them pay dividends from unforeseen profits and/or while highly leveraged. These unhealthy dividend practices leave Saccos unable to pay dividends in the long term sustainably, besides exposing them to insolvency. Existing studies on the factors of dividend payout in Kenya were mainly used unidimensional variables and/or were limited in sectoral scope. The present study targeted all registered DTSSaccos in Kenya (n=179) over an eight-year period (2012-2019). Panel data modelling was used, which was a departure in methodology from previous studies. The effects of financial performance, financial leverage. Descriptive results showed that financial performance measured by ROE for for DT-saccos was below industry standards at 3%. During the panel period, Saccos failed to improve their ability to generate resources from equity yet, they sustained a high dividend payout. To maintain their dividend payout, the DT-saccos borrowed funds to pay dividends Financial leverage measured by Debt ratio had an inverse, significant effect on dividend payout. Between 2012-2019, the debt ratio of DT saccos averaged 195%, and this ratio was much higher than the comparable ratio for the banking industry, which was just 20% between 2012-2019. The findings deepen our understanding of the interplay of factors influencing dividend payout in DT-Saccos in Kenya. Small saccos have higher dividend payout compared to large ones. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital.
Abstract: This study explored the influence of financial performance and financial leverage on Deposit-Taking Saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members consistently. Many of them pay dividends from unforeseen profits and/or while highly leveraged. These unheal...
Show More
