Impact of Digital Economy and Value Creation on the Profitability of Multinational Enterprises in Nigeria

Abstract

The study empirically evaluates the impact of broadband penetration and value creation on the profitability of MNEs in Nigeria. The study adopted the survey research design to elicit responses from 1000 Nigerians that were randomly sampled with an e-questionnaire and 152 staff of NCC. The Cronbach Alpha model shows overall reliability of 0.706. The result from the multiple regression from the 1000 Nigerians shows an Adjusted R-square of 0.230 which explains that 23.0% of the variability of profitability is explained by broadband penetration and value creation. The correlation coefficient result shows that there is a significant and moderate relationship between profitability and broadband penetration with a value of 0.414. Similarly, profitability and value creation also show a significant and moderate relationship with a value of 0.359. However, the relationship between value creation and broadband penetration was significant and moderately correlated at 0.346. The Adjusted R-square of 0.040 for the 152 staff of NCC shows that 4.0% of the variability of profitability is explained by broadband penetration and value creation. The correlation coefficient shows that there is a positive but weak relationship between profitability and broadband penetration of 0.111. Also, profitability and value creation have a positive but weak relationship of 0.215. More so, broadband penetration and value creation show a positive but weak relationship of 0.159. The F-statistic value of 4.115 and a P-value of 0.018 indicates that the variables are statistically significant. The study recommended that the Nigerian Communication Commission should develop a national backbone network through which Nigerians can access the internet rather than relying on mobile broadband whose coverage is limited in rural areas.