Gusau Journal of Accounting and Finance

THE IMPACT OF GENDER DIVERSITY ON EARNINGS QUALITY OF LISTED FINANCIAL SERVICES FIRMS IN NIGERIA: ANALYSIS OF TWO-STAGE LEAST SQUARES

Joseph Olorunfemi Akande — Thu, 30 Jan 2025 00:00:00 +0000

This study investigates the impact of gender diversity on the earnings quality of listed financial service firms in Nigeria, focusing on the role of gender diversity and board size. Utilizing a correlation research design, it aims to test and predict the relationships among these variables. The sample consists of 36 financial service firms listed on the Nigerian Exchange Group, selected based on criteria ensuring the availability of relevant data from 2008 to 2022. Secondary data from these firms' annual financial reports provided the basis for analysis. To address potential endogeneity, a two-stage least squares (2SLS) regression was used, with instrumental variables estimating the endogenous variables. Additionally, Generalized Least Squares (GLS) and Feasible Generalized Least Squares (FGLS) methods were applied to handle heteroskedasticity and autocorrelation issues. The econometric model assessed earnings quality as the dependent variable, with female financial experts, female CEOs, and female board members of foreign nationality. Earnings quality was measured using the accruals quality model, evaluating the reliability of reported earnings. The findings reveal significant relationships between board attributes and earnings quality, emphasizing the role of gender diversity in enhancing the integrity of financial reporting. The results reveal significant positive relationships between the presence of female financial experts and female CEOs on the board with improved earnings quality, suggesting that gender diversity contributes to more reliable financial reporting. Diagnostic tests, including Multicollinearity, Autocorrelation, Heteroskedasticity, and Normality, confirmed the robustness of the results. This research contributes to the understanding of corporate governance by highlighting how board composition influences earnings quality, highlighting the relevance of gender diversity in corporate boards, and providing valuable insights for policymakers, investors, and stakeholders in the financial industry.

THE IMPACT OF AUDIT QUALITY ON FIRM’S PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Fatima Shehu Giwa, Prof. Benjamin Kumai Gugong , Gloria Pam Dachomo — Mon, 28 Oct 2024 00:00:00 +0000

Abstract The study examines the relationship between audit quality and firm’s performance of listed consumer goods firms in Nigeria, it used both the agency theory and credibility theory. The data used was extracted from secondary source using the annual reports and accounts of listed consumer goods firms in Nigeria for the period of ten years, 2012 to 2021 from 16 consumer goods firms in Nigeria. Multiple linear regression technique is used to analyze the data, using descriptive statistics, Pearson correlation with the help of STATA, as a statistical tool of analysis. While, return on equity and economic value added were used as measures for firm’s performance. The finding from the study indicates that audit firm independence, joint audit, audit firm experience and audit firm partner tenure all have a positive and significant impact on firm’s performance of listed consumer goods firms in Nigeria, only audit firm reputation indicates a negative impact. Hence, shareholders are advised to ensure that their firms are audited by good audit firms that provides more independent, accurate and efficient audit services.

WOMEN IN TOP ECHELON POSITIONS AND THEIR EFFECTS ON CARBON EMISSION DISCLOSURE: EVIDENCE FROM AN EMERGING NATION

Saheed Olanrewaju Issa, Abdulkadri Toyin Alabi, Abdulbaki Teniola Ubandawaki — Mon, 28 Oct 2024 00:00:00 +0000

Gender diversity in leadership roles and carbon emissions disclosure are two subjects that are generating attention in the corporate landscape. Hence, this study aims to examine the impacts of women in top-echelon positions on carbon emission disclosure of Nigerian companies during the years 2012–2021. Content analysis was employed on the annual report and sustainability report of 12 sampled listed deposit money banks in Nigeria to capture data on carbon emissions. The collected data were analyzed with the aid of the generalized least squares (GLS) multiple regression technique. Using 120 firm-year paneled observations, the result of the GLS showed that women as CEOs, board members, and audit committee members are not a significant determinants of corporate carbon disclosure. The findings have significant implications both in theory and practice, as they contribute to the ongoing discussion about women in governance and corporate sustainability.

CEO CHARACTERISTICS AND FINANCIAL PERFORMANCE OF LISTED DMBS IN NIGERIA

Mon, 28 Oct 2024 00:00:00 +0000

This study seeks to investigate the effect of Chief executive officer’s characteristic on financial performance of listed deposit money banks in Nigeria. The study adopts correlation and ex-post facto as research design. The population of the study consists of 16 listed deposit money banks in Nigeria and the sample of the study consists of 14 listed deposit money banks in Nigeria. Census sampling technique is employed. Multiple regression model based on pooled ordinary lease square robust test is adopted to analyze the panel data obtained from audited financial statements of the sampled listed deposit money banks between 2012- 2021. The study reveals that Chief executive officer’s tenure has a negative and significant influence on financial performance, while, Chief executive officer’s gender was discovered to have a positive effect on financial performance. It is recommended that the board members should initiate coherent and integrated and policies towards reducing tenure ship of the Chief executive officers below the average which will ultimately improve the financial performance of the banks. Also, the board should initiate policy that will always consider female gender in the appointment of Chief executive officer’s positions considering the risk appetite of the female Chief executive officer’s particularly in risk and financial management of the banks which will also influence the financial performance of the listed deposit money banks in Nigeria.

POST COVID-19 PANDEMIC: COMPARATIVE STUDY IN THE VALUE RELEVANCE OF ACCOUNTING INFORMATION BETWEEN LISTED MANUFACTURING FIRMS AND LISTED SERVICE FIRMS IN NIGERIA

Abubakar, Aliyu, Abbas, Abdulrahman Ngadi, Abdu, Abubakar — Mon, 28 Oct 2024 00:00:00 +0000

The study investigated the differences in the value relevance of accounting information between the listed service firms and the listed manufacturing firms in Nigeria in the post COVID-19 period. Secondary data was used from the annual reports of the sampled firms and cash craft stock broker website between 2021 and 2023. correlation research design was used. The population of the study included all the seventy-three listed manufacturing firms and twenty three listed service firms in Nigeria as at 31st December, 2023. The sample size was fifty-two firms from the listed manufacturing firms and twenty from the listed service firms; multiple panel regression model was used for the purpose of analysis. Based on the findings of the study, earnings per share and book value of equity reported by listed manufacturing firms determines share price more than the ones reported by the listed service firms. However, divided among the listed service firms should be given preference over dividend reported by the listed manufacturing firms in Nigeria in equity valuation. Additionally, listed manufacturing and financial service firms in Nigeria should work towards increasing their earnings as it determines share price. As well, they should suitably manage their book value, pay dividend to investors from the profit generated and a balance should be strike between cash inflow and out flow from operations to avoid cash shortage or keeping unneeded cash. Moreover, SEC and FRC should maintain their effort in ensuring the integrity of information released by the listed firms in Nigeria.

ENVIRONMENTAL AND SOCIAL INFORMATION DISCLOSURE QUALITY AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA

Saka Tunde Abdulsalam, Ph.D — Mon, 28 Oct 2024 00:00:00 +0000

The General perception of investors and other stakeholders is that self-developed environmental and social information disclosure (ESID) of companies lack quality required to make informed business decision which may impact company operating cash flow (OCF). Although, poor quality ESID often damaged company reputation and cause competitive setback that usually bring down OCF. Based on this backdrop, this study explores ESID quality of Listed Manufacturing Companies in Nigeria (LMCN) based on Global Reporting Initiative (GRI) and evaluate the impact on their OCF. The study employs Ex-Post Facto research design and data collected from annual reports of forty-seven LMCNs were analyzed using panel regression analysis based on random effect model. While quality of ESID of companies were measured based on GRI sustainability quality principle such as Balance, Clarity, Timeliness, Relevance, Reliability and Comparability, financial performance (FP) was measured by OCF of the studied companies. Findings from regression result revealed that quality of environmental and social information disclosure displays a significant and positive correlation with OCF. This study concluded that substantive investment in sustainability activities and quality disclosure is a form of undisputed contribution to sustainable development that in turn provide a basis for securing enhanced FP. This study recommends that manager should henceforth, consider potential returns that will come from investment in substantive environmental and social activities and quality disclosure that follow GRI quality reporting principle.

THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BANK PERFORMANCE IN NIGERIA

Ibrahim Yinka Agbeyinka — Thu, 30 Jan 2025 00:00:00 +0000

The objective of the study was to investigate the impact of corporate social responsibility on bank’s performance in Nigeria. The ex-post-facto research design was adopted, and the study focused on selected banks. A yearly panel series data from 2007-2016 were sourced from the banks’ annual reports and Nigerian Exchange Group. The data was subjected to panel regression analysis to estimate the parameters of the model. The findings revealed that CSR have a significant and positive impact on net profit margin, suggesting that firms actively engaged in corporate social responsibility initiatives tend to experience better profitability. The analysis also shows a negative relationship between corporate social responsibility and earnings per share, indicating that corporate social responsibility may contribute to long-term value creation. Firm size emerges as a crucial factor in determining financial performance. Larger firms generally enjoy higher returns on equity and are more efficient in utilizing their assets to generate returns. The study concluded that the dual-edged nature of corporate social responsibility engagement, where the benefits to profitability and long-term value must be balanced against the potential short-term financial drawbacks. The study therefore recommended that firms should strategically integrate corporate social responsibility initiatives with their core business objectives to maximize the positive impact on profitability. firms should carefully evaluate the timing and scale of their corporate social responsibility investments. Firms should focus on streamlining operations to prevent the erosion of net profit margins. This can be achieved by adopting advanced technologies, optimizing supply chains, and reducing unnecessary overhead costs. Banks should establish clear metrics for evaluating the success of their corporate social responsibility programs, regularly review their impact on financial performance, and adjust as needed to maintain a balance between social responsibility and profitability.

THE IMPACT OF FIRM CHARACTERISTICS ON ACCRUALS AND REAL EARNINGS MANGEMENT OF LISTED MANUFACTURING FIRMS IN NIGERIA

Muhammad, Aisha Chado — Mon, 28 Oct 2024 00:00:00 +0000

The concerns about earnings management arose after the fall of many multinational companies. Extant literature has shown accruals and real earnings management techniques as dual ways of manipulating earnings. However, prior literatures have dwelled on AEM making it vast and creating a literature gap for REM with unanswered questions. This study examined the effect of firm characteristics on both and AEM was measured using the extended jones model by Yoon, Miller & Jirapon (2006) model while REM was measured by the Rowchowdhury (2006) model. The research sample was 40 firms drawn from listed manufacturing firms on the Nigerian Exchange Group (NGX) for the period 2007 to 2021. The ex post factor research design was used to determine the relationship between the dependent variable (Earnings management proxy by accruals earnings management and real earnings management), the independent variables (firm characteristics proxy by firm size, firms’ growth, firms’ profitability and audit quality) and the tradeoff between AEM and REM. The study used the multiple linear regressions as a tool of analysis. The results indicated; firm size has a consistent negative impact on both AEM and REM, with statistically significant results indicating that larger firms may face unique challenges related to financial reporting quality. Return on assets (ROA), have negative relationship with both AEM and REM which indicates Manager’s aggressive behavior to meet the benchmark has a significant positive association with both AEM and REM. Audit quality was also found to have a positive effect for both AEM and REM (0.0081 and 0.0008) which shows that the choice of audit firm affects both AEM and REM. Moreover, the results indicate that highly leveraged firms engage more in real earnings management than the accruals earnings management. The study concludes that firm growth measured by leverage has a significant positive impact on REM and higher this could be because managers decrease AEM because of strict audits and pressure of debt covenant. The perhaps increased REM knowing that detecting REM is more difficult than AEM, hence manipulated real activities with the purpose of observing finance obligations. Therefore, this study recommends heightened oversight and transparency, particularly in the context of real earnings management; regulators can work towards curbing detrimental practices that impact firm value.

THE IMPACT OF ESG PRACTICES ON THE RISK PORTFOLIO OF LISTED OIL AND GAS FIRMS IN NIGERIA USING A MULTILAYERED CRITERION

Joseph Olorunfemi Akande — Thu, 30 Jan 2025 00:00:00 +0000

This study investigates the impact of Environmental, Social, and Governance (ESG) factors on the risk-adjusted returns of Nigerian oil and gas firms listed on the Nigerian Exchange Group (NGX) over a 11-year period (2012–2022). The study was anchored on signalling theory. Utilizing a correlational research design, data was collected from eight firms meeting inclusion criteria, focusing on ESG scores as independent variables, with Firm Size as a control variable, and risk-adjusted returns as the dependent variable. Diagnostic tests ensured adherence to Best Linear Unbiased Estimator (BLUE) assumptions. Employing both Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) regression techniques, the study addresses potential endogeneity, using industry norms as an instrumental variable (IV) in the 2SLS model. Findings indicate significant, positive relationships between ESG factors and risk-adjusted returns, emphasizing the financial viability of sustainable practices in a sector known for environmental and social risks. Hence, to strengthen financial and operational resilience, Nigerian oil and gas firms are encouraged to prioritize robust environmental practices, including emission reduction, waste management, and prevention of oil spills. Given the social challenges in regions like the Niger Delta, firms should focus on building trust and maintaining positive relationships with local communities through initiatives in healthcare, education, and infrastructure. This study provides key insights into how ESG engagement in Nigerian oil and gas firms may influence firm stability, resilience, and investor confidence, underscoring the role of signalling theory in linking ESG performance to enhanced corporate valuation.

EFFECT OF SELECTED MACROECONOMIC VARIABLES ON STOCK MARKET VOLATILITY IN NIGERIA

Mon, 28 Oct 2024 00:00:00 +0000

The Nigerian economy has undergone significant changes in terms of policies that are aimed at improving the performance of the economy and to be able to attract foreign direct investments. It is observed that the performance of the stock market depends to a large extent on the economic condition of the country hence macroeconomic variables are said to have potential effect on stock market volatility. The study focused on macroeconomic variables such as Economic recession, inflation rate, interest rate and stock market liberalisation using monthly data from February 2010 to September 2022. The Augmented Dickey Fuller (ADF) and Philip Perron (PP) unit root tests were conducted on the time series data. The ARCH LM tests was also carried out and the EGARCH model was estimated under the assumption of normally distributed model. The ARCH tests results revealed that there exists ARCH effects in the NGX stock returns implying the presence of volatility clustering in the return series. The results also revealed that Economic recession has a negative impact on stock market volatility. Inflation rate was also found to have a significant positive effect and Interest rate has a positive insignificance effect on volatility. Stock market liberalisation was also found to have a significant negative impact on volatility. The findings also indicate volatility persistence in the Nigerian stock market and that bad news generates higher volatility than good news of the same magnitude. It is recommended that regulators should come up with policies towards restoration of investor’s confidence in the market. Nigerian exchange group should also develop robust risk management strategies to protect investments during economic downturns. This could include diversifying portfolios and using hedging techniques to ensure minimum volatility in stock market prices.

MODERATING EFFECT OF AUDIT QUALITY ON VALUE RELEVANCE OF FAIR VALUE MEASUREMENTS HIERARCHY OF LISTED FINANCIAL SERVICES COMPANIES

Tesleem Olayinka Adeyemi — Mon, 28 Oct 2024 00:00:00 +0000

The International Financial Reporting Standards (IFRS) was developed to enhance transparency and high-quality information as a principle-based standard that allows some degree of flexibility in financial reporting process. An important feature of IFRS is that of paradigm shift from historical cost to fair value-based measurement of certain assets and liabilities. Consequently, the reliability of fair value measurement became a subject of concern, particularly in most developing economies with inactive market for financial instruments. The study examines the value relevance of fair value measurement hierarchy for financial instruments taking into consideration the moderating role of audit quality. The sample comprised of thirty-six (36) out of fifty-nine (59) financial services companies listed on the Nigerian Exchange Group as at 31st December, 2018. The study employed OLS multiple regression and heteroskedasticity corrected standard errors were used to test the relationship. The study revealed fair value measurements hierarchy is value relevant as it has significant impact on share prices. Specifically, Level 1 and Level 2 fair value financial assets were found to have positive significant influence on the share price of listed financial services companies in Nigeria while Level 3 fair value financial assets were found to be negatively and insignificantly influencing the share prices. Lastly, audit quality was found to be positively and significantly influencing the value relevance of fair value financial assets of listed financial services companies in Nigeria. The study recommends among others, the need for regulatory authorities to create an active market for financial instruments to fully achieve the fundamental objective of fair value and to limit the uncertainty and ambiguities around the application of level 3 fair value hierarchy. Also, investors should plan and allocate their investments to companies with lower information risk (i.e companies with lower level 3 fair value estimates) in making appropriate investment decisions relating to financial instruments such as stocks, bonds, and fixed interest deposit.

EFFECT OF AUDIT QUALITY ATTRIBUTES AND IFRS ADOPTION ON FINANCIAL REPORTING QUALITY OF LISTED MANUFACTURING FIRMS IN NIGERIA

Muhammad, Aisha Chado — Mon, 28 Oct 2024 00:00:00 +0000

The accounting and auditing profession in the last two decades have been in the limelight after the fall of many multinational companies. The fall of these companies were examined by many researchers and were linked to audit quality deficiencies and inadequacies of financial reporting standards. To forestall future occurrences the international financial reporting standard (IFRS) adoption gained global momentum as it is expected to enhance all the proxies of financial reporting quality. Similarly, the International Auditing and Assurance Standards Board (IAASB) promulgated new set of auditing standards in an attempt to regain public confidence. This is because audit quality is an essential element in achieving global financial stability and high-quality financial reporting. This study examined the effect of audit quality attributes (proxy by audit report timeliness, audit fees and audit firm size) and IFRS adoption on financial reporting quality (proxy by accrual and real earnings management) of 40 listed manufacturing firms on the Nigerian Exchange Group (NGX). The study adopted a Correlational research design using secondary data for the period 2007 to 2021. Panel data technique was employed, while fixed and random effects model were used for estimation. Descriptive Statistics, Pearson correlation coefficient and multiple regression analysis were used for analysis to determine possible link between the variables identified. The accrual earnings management (AEM) was measured by the Yoon, Miller & Jiraporn (2006) model and the real earnings management (REM) measured by the Roychowdhury (2006). The regression results reveal a R2 of 39% and 41% which suggests AEM and REM are close substitutes. Audit report timeliness (0.0012 and 0.0003) positive and statistically significant. This suggests a positive impact on financial reporting quality and the length of time from a company’s accounting year end to the date of the auditor report can determine the FRQ of listed manufacturing firms in Nigeria. Audit fee (-0.0604 and – 0.0418) and Audit firm size (-0.9163 and -0.0096) have negative correlation and are also statistically not significant to financial reporting quality. The adoption of IFRS for AEM and REM (-0.5436 and 0.0091) however, they have P- values which are positive and significant at 0.05 suggesting significant association of manufacturing firms listed in NGX negatively affects AEM but positively affects REM. Hence, the study recommends the enhancing the implementation and oversight of IFRS standards and ensuring that the regulations are not only adhered to but also comprehensively understood, and any unintended consequences are mitigated.

ELECTRONIC BANKING AND PERFORMANCE OF BANKING SECTOR IN NIGERIA

Kayode David KOLAWOLE — Thu, 30 Jan 2025 00:00:00 +0000

Electronic banking has become an important issue in gaining a competitive advantage while maintaining and growing overall effectiveness of banking sector. Despite the importance of electronic banking, the banking sector has continued to face challenges, such as long queues in certain banking halls, excessive cash handling by customers, and frequent network failures. Hence this research examined electronic banking and performance of banking sector in Nigeria. The financial reports of the chosen Nigerian deposit-taking banks provided the secondary data used in this investigation. The acquired data was analyzed using static panel data regression. With a coefficient value of 0.0080 and at the 5% significant level, the regression analysis's findings showed that online banking has a major impact on Nigerian deposit money banks' net interest revenue. The study's findings also showed that, at the 5% significant level, automated teller machines have an effect on the net interest revenue of deposit money institutions in Nigeria, with a coefficient value of 0.0063. With a coefficient value of 0.0056 and at the 5% significant level, the study also showed that mobile banking significantly affects the net interest revenue of deposit-taking institutions in Nigeria. The research concludes that Nigerian deposit money banks' performance is greatly impacted by electronic banking. The study recommends that in order for banks to truly gain from electronic banking, more customer orientation should be undertaken to raise awareness and encourage users to use the services.

DO AUDIT COMMITTEE AND BOARD ATTRIBUTES INFLUENCE ENVIRONMENTAL DISCLOSURE: AN EMPIRICAL INVESTIGATION OF LISTED FIRMS IN NIGERIA

Haruna Muhammed Musa — Mon, 28 Oct 2024 00:00:00 +0000

Abstract Corporate environmental practices have faced intense stakeholder scrutiny due to severe ecological concerns affecting local communities and global stakeholders. Using correlational design, this study investigates how audit committee and board of directors’ attributes impact on environmental disclosure among the Nigerian listed firms. A dataset of 95 listed Nigerian companies across diverse sectors was analyzed using regression analysis for the period of 2012-2022. Fixed effect regression results indicates that audit committee independence and board of directors’ nationality positively influence the environmental disclosure of the Nigerian listed firms. On the contrary, frequency of audit committee meetings has significant negative effect on environmental disclosure. This study’s outcome offer valuable insight for Nigerian regulatory bodies and policymakers to inform environmental reporting guidelines alongside financial reporting in annual reports. The study recommends among others that regulators such as Security and Exchange Commission should encourage firms in considering appointing expert foreign nationals to their board as evidenced that their presence can significantly impact environmental information disclosure, leveraging their diverse expertise and experience to enhance management’s handling of environmental issues.

IMPACT OF EXTERNAL DEBTS ON ECONOMIC GROWTH IN NIGERIA

Ibrahim Yinka Agbeyinka — Thu, 30 Jan 2025 00:00:00 +0000

The study examined the impact of external debts on economic growth in Nigeria. Annual time-series from 2001 to 2022, sourced from Central Bank of Nigeria, Nigerian Exchange Group and Securities Exchange Commission, are adopted. The data was subjected to linear regression analysis which was used to estimate the parameters of the model. The findings revealed that external debts services, debts services costs, and exchange rate fluctuations all have a negative relationship with economic growth. This highlights that higher burdens of external debt servicing and greater exchange rate volatility are associated with reduced economic growth. Thus, the study recommends that government should implement robust debt management strategies that prioritize sustainable debt levels and efficient servicing, The government should introduce policies aimed at stabilizing exchange rates to reduce volatility. Moreso, they diversify the economy, especially by promoting sectors less susceptible to external shock, to reduce dependence on external factors that could exacerbate debt and exchange rate vulnerabilities.

EFFECT OF COMPLIANCE COST AND TAX BURDEN ON TAX COMPLIANCE OF SMALL AND MEDIUM-SCALE ENTERPRISES IN BENUE STATE, NIGERIA

Mon, 28 Oct 2024 00:00:00 +0000

Tax compliance is critical for small and medium-scale enterprises (SMEs) in Benue State, Nigeria, significantly affecting their growth and sustainability. The SME sector is pivotal to the economic growth and development of any nation and Nigeria is no exception. As a result, this study examined the effect of cost of compliance and tax burden on tax compliance of small and medium-scale enterprises (SMEs) in Benue State of Nigeria with the view to further provide empirical evidence on the factors affecting tax compliance. To achieve this, a survey of SMEs in the three senatorial districts of Benue state was conducted to collect data on the perceptions of SMEs on the effect of cost of compliance and tax burden on tax compliance in Benue State of Nigeria. The study’s population comprised the 25,913 registered SMEs in Benue state of Nigeria. The sample size was 552 SMEs. This study employed the use a cross-sectional survey and correlational research designs. The sampling technique adopted stratified proportionate random. Data were collected through the use of questionnaires and analyzed using Partial Least Squares -Structural Equation Modelling (PLS-SEM). The study found that the cost of compliance and tax burden showed a positive and significant effect on the tax compliance of SMEs in Benue State of Nigeria. The study recommends that tax authorities to work astutely towards making compliance more affordable and straightforward for SMEs while also strengthening enforcement measures to discourage non-compliance. Tax authorities should come up with a simple, sufficient, tax return system to help taxpayers to complete their tax returns accurately. Government should formulate policies that aim to reduce the cost of compliance while ensuring a balanced tax burden could enhance voluntary compliance, leading to a broader tax base and more sustainable public finance.

THE EFFECT OF BANK SECTORAL CREDIT AND EXCHANGE RATE ON FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Mon, 28 Oct 2024 00:00:00 +0000

The study examined the effect of deposit money bank’s credit facilities and exchange rate on the corporate financial performance of listed manufacturing firms in Nigeria. Data for the study were sourced from the annual reports and accounts of the sampled firms for the period of ten years spanning from 2013 to 2022, the collected data were analyzed using Panel regression analysis, result of the analysis showed that credit facilities had a significant and negative effect on the financial performance of the sampled manufacturing firms in Nigeria. It was also revealed that the effect of the exchange rate on the return on assets of manufacturing firms in Nigeria is significant and negative. Accordingly, the study concludes that sectoral allocation and exchange rate are significant determinants of financial performance. Considering the negative and significant effect of sectoral allocation and exchange rate on the profit of manufacturing firms in Nigeria the study therefore, recommends that the government of Nigeria should implement policies that would encourage lending and also ensure a stable exchange rate.

THE EFFECTS OF INTEREST RATE AND MONEY SUPPLY ON SYSTEMATIC RISK ASSOCIATED WITH RETURN IN NIGERIAN EXCHANGE

Mon, 28 Oct 2024 00:00:00 +0000

Stock market investors are largely compensated for taking systematic risks as idiosyncratic are controlled through effective portfolio construction but systematic risk cannot be diversified. As such, there is increasing concern among academics to understand systematic risks and its determinants in emerging markets. Hence, the need to investigate the effect of interest rate and money supply as determinants of systematic risk associated with return in the Nigerian Exchange. The study was correlational in nature, and data for the study was collected from the CBN statistical bulletin and the Nigerian Exchange. Monthly data from April, 2012 to December, 2022 were used for the analysis. The study conducted data analysis using autoregressive distributive lag model and other preliminary analysis. Result from the study revealed that money supply has positive significant effect on systematic risk. On the other hand, interest rate exhibited negative and statistically insignificant effect on systematic risk. The study came to the conclusion that money supply is a determinant of systematic risk as it can influence its behaviour significantly while interest rate can affect systematic risk but the magnitude is statistically insignificant. Therefore, the study recommended that investors should continuously study the changes in the behaviour of the determinants in order to make sound investment decision and maximize their return from the market. The government through the CBN should also ensure that they consistently improve their policies on interest rate and money supply. This will help the market to operate efficiently.

EFFECT OF FIRM ATTRIBUTES ON THE GROWTH OF HEALTHCARE COMPANIES LISTED ON THE NIGERIAN EXCHANGE GROUP

Salisu Isyaku Dahiru, Adeyemi Tesleem, PhD, Suleiman Salami, PhD — Mon, 28 Oct 2024 00:00:00 +0000

The Nigerian healthcare industry is poorly performing compare to global standards and remains heavily dependent on imports especially Consumer Drugs and Vaccines. It is estimated that total pharma market has come down from $ 717 million ?293.97B in 2016 to $ 607 million ?248.87B in 2017 with negative growth of 15.6%. In light of this, the study examined the effect of firm attributes on the growth of listed healthcare companies in Nigeria from the period of 2013-2022. The population of the study consisted of eleven 11 healthcare companies listed in Nigeria, three 3 healthcare companies were later filtered out reducing the total population to eight 8 adjusted population. Secondary data were extracted from the annual financial reports of the eight 8 adjusted population from 2013 to 2022. The dependent variable which is firm growth was proxied by changes in sales of the companies, while firm attributes was proxied by leverage, profitability, liquidity and firm size. After all the necessary diagnostic tests were conducted the outcome supported the use of the Random Effect regression analysis technique. The regression result shows that profitability and liquidity have positive and significant effect on the growth of healthcare companies in Nigeria. Therefore, the study concluded that profitability and liquidity are the major determinants of healthcare companies’ growth in Nigeria. In line with the conclusion, the study recommended that the management of the listed healthcare companies in Nigeria should increase their profitability to enhance their growth. Also, the management of the listed healthcare companies in Nigeria should maintain a reasonable ratio of liquidity to ensure their growth.

CORPORATE SOCIAL RESPONSIBILITY AND PERFORMANCE OF FIRMS IN LAGOS STATE, NIGERIA

Kayode David KOLAWOLE — Thu, 30 Jan 2025 00:00:00 +0000

Corporate social responsibility (CSR) is widely practiced by multinational companies in developed countries. But Nigerian companies are not widely accepted the concept. Hence, this study examines the impact of CSR on the performance of companies in Lagos State. The study used primary data collected through a questionnaire survey. Ordered logit and Structural Equation Modelling method of multiple regressions was used to analyze the data obtained. The results indicate that educational accountability has a positive, statistically significant effect on service delivery at the 1% significance level. Environmental responsibility was also found to have a significant impact on service delivery. Ethical responsibility also shows a significant effect of service provision at the 1% level of significance. Additionally, a significant effect of service provision is found at the 1% level of financial responsibility. The study concludes that CSR plays an important role in increasing the performance of companies in Lagos State. Nigeria. For this reason, it is recommended that companies should prioritize education and CSR initiatives as these have been identified as key drivers of improved and sustainable customer service.

DOES TAXATION AFFECT BANKS’ PROFITABILITY: EVIDENCE FROM NIGERIA

Emmanuel Imuede Oyasor — Thu, 30 Jan 2025 00:00:00 +0000

Abstract Taxation and tax policy of any economy has a major implication on the growth “and performance of businesses in every economy. fiscal policy instrument should not be rigid for the taxpayers. This is because a flexible and viable taxation system has the capacity to stimulate economic activities. The paper examines how taxation impact the profitability of commercial banks in Nigeria. To test the hypothesis, the paper applied the panel regression on published information from fifteen banks from 2011-2022. The findings reveal that the marginal tax rate, effective tax rate and the average tax rate have strong positive and significant effects on return on asset. The outcome offers corporations useful insights on tax planning strategies properly and show how their tax avoidance skills could be used without practicing tax evasion. Amongst others, the recommends that regulators should grant tax incentives and reforms to reduce the tax burden on companies. Moreso, governments should formulate unequivocal tax policies that would aid tax law and administration that would encourage business growth.

WORKING CAPITAL MANAGEMENT AND MANUFACTURING PERFORMANCE IN NIGERIA

Adedeji Daniel Gbadebo — Thu, 30 Jan 2025 00:00:00 +0000

Effective working capital is necessary for financial growth, sustainability, reliable liquidity and profitability of a firm. Management working capital involve the optimization of inventory, debtors and creditor to ensure profitability and liquidity of a firm. The paper aims to show how working capital management affect the performance of manufacturing firms in Nigeria during 2013 and 2022. For this, the paper tests two hypotheses: The first is that it assumes no significant relationship between working capital management and return on assets. The second assumes that working capital management does not significantly impact on return on equity of the companies in Nigeria. To evaluate this, we the study examines the relationship between working capital management variables, including stock turnover, debtor collection period, creditor collection period, and current ratio and performance indicators (return on assets and return on equity). The findings suggest that efficient management of these components enhances performance since stock turnover, debtor collection period, and creditor collection period are positively associated with financial performance. Because this has implication for future performance, the paper offers, amongst others that to enhance the profitability firms in Nigeria, there is the need to adopt more financial technologies can streamline working capital management processes, such as automating inventory and receivables tracking. Also, should be strategic extension of creditor collection periods without compromising supplier relationships to improve cash flow management. For instance, stricter credit control measures can be implemented to reduce the debtor collection period and can improve cash availability and profitability.

THE MULTIDIMENSIONALITY FOREIGN DIRECT INVESTMENT’S IMPACT ON THE ECONOMY

Emmanuel Imuede Oyasor — Thu, 30 Jan 2025 00:00:00 +0000

Foreign direct investment (FDI) has been a crucial inflow source for many economies. The contribution of FDI to growth has continued to generate extensive debates. The debate centered on channels through which FDI may enhance technological diffusion through spillover effect of knowledge and new capital goods to better human conditions. In this direction, some earlier literatures have also argued that the contribution of FDI largely dependent on the circumstances in the recipient countries. The study follows the endogenous growth model theory and eclectic theory to demonstrate the multidimensionality impacts of FDI inflows on gross domestic product (GDP), human capital development/utilization (HCDU), national revenue generation (NRG), gross fixed capital formation (GFCF) and gross national savings (GNS), based on published information over the period of 1982 to 2022. We found that FDI have significant effect on GDP; FDI do significantly affect on human capita development/utilization; FDI has no significant impact on NRG; FDI has no have no significant connection with gross fixed capital formation and FDI have significant effect on gross national savings in Nigeria.

PRIVATE CAPITAL FORMATION, PUBLIC SECTOR CAPITAL FORMATION AND ECONOMIC GROWTH IN SOUTH AFRICA

Ahmed Oluwatobi ADEKUNLE — Thu, 30 Jan 2025 00:00:00 +0000

This study examines the relationship between private capital formation, public sector capital formation and economic growth in South Africa. Annual data is used and sourced from WDI to evaluate the study, which spans from 1986-2021. The ARDL approach is employed to analyze the data. The unit root tests indicate that the data are stationary and the bounds test signify that the variables are cointegrated at the long-run. Furthermore, the findings revealed A rise in private capital formation will result in a notable increase in economic growth, as indicated by the coefficients of all the variables in the ARDL long-run result. Private capital formation positively and significantly influenced the nation’s economic expansion. The study recommends increasing private sector capital formation for resilience and offering incentives that encourage adaptation investments, the government should concentrate on creating an environment that allows the private sector to flourish.

MACROECONOMIC DETERMINANTS AND STOCK MARKET VOLATILITY ADMIST THE PERIOD OF ECONOMIC RECESSION IN NIGERIA

Mon, 28 Oct 2024 00:00:00 +0000

The goal of liberalizing the Nigerian stock market was to improve its performance and increase market efficiency. Nonetheless, it appears that the onset of Nigeria's 2016 economic downturn has skewed the degree to which these macroeconomic factors influence volatility on the Nigerian Stock Exchange. Using monthly data from February 2010 to September 2022, the study investigated how the economic slump affected the connection between macroeconomic factors and stock market volatility in Nigeria. The exchange rate and stock market liberalization are the macroeconomic factors that are being studied. The time series data was subjected to the Philip Perron (PP) and Augmented Dickey Fuller (ADF) unit root tests. The ARCH LM tests was also carried out and the EGARCH model was estimated under the assumption on normally distributed. The ARCH tests results revealed that there exists ARCH effects in the NGX stock returns implying the presence of volatility clustering in the return series. The findings also showed that the relationship between macroeconomic factors and stock market volatility is negatively impacted by economic recession. It was discovered that the exchange rate had little effect on volatility. It was also shown that liberalization of the stock market significantly reduced volatility. The results also show that there is persistent volatility in the Nigerian stock market and that negative news causes more volatility than positive news of the same size. It is recommended that authorities develop regulations aimed at reviving investor faith in the market.