Financial Performance In Nigeria Research Articles

Internal Control and Firms’ Financial Performance in Nigeria: A Study of Selected Manufacturing Firms

This study was carried out for the purpose of understanding the impact of internal control on firm performance. This research wanted to prove that internal control played an important role on the performance of ten selected manufacturing firm in Nigeria. Internal control factors like board size, audit committee size, and board independence were investigated to see how they impact performance. Secondary data gotten from the ten manufacturing firms’ financial statement were analyzed using the panel data regression analysis. Although the fixed effect and the random effect regression were carried out, the Hausman test pointed to the fixed effect regression as significant, hence it was focused on. Findings from the fixed effect revealed that board size, audit committee size, and board independence were all significant in impacting firm performance measured by equity returns. The study therefore recommended among others that the Board of directors should be more diverse in the composition of board members as this would boost their independence.

The Moderating Effect of Vertical Agency Crisis on the Relationship Between Corporate Governance and Financial Performance in Nigeria

This study examines the moderating effect of vertical agency crises on the relationship between corporate governance mechanism and financial performance in Nigeria covering 2013 to 2022. To achieve this purpose, this study used precise proxies for the dependent, independent and moderator variables of interest. Based on a descriptive and ex-post facto research design, this study analyzed a set of panel data sourced from annual financial reports of eighteen (18) consumer goods firms drawn from a population of twenty-five (25) listed consumer goods firms in Nigeria. Mixed effect multi-level regression analysis estimator together with moderated regression analysis technique were employed to test the hypotheses after meeting necessary conditions for obtaining non-spurious least square regression estimates. The findings show that board ownership has a statistically significant relationship with financial performance, but board size, board independence and board gender diversity have insignificant relationship. Further, the findings from this study reveals among others that vertical agency crises have an insignificant moderating effect on the relationship between board independence and financial performance, the moderating effect is significantly positive in relation to board gender diversity for listed consumer goods firms in Nigeria . But for the variable of board size and board ownership, the moderating effect of vertical agency crises was seen to be statistically insignificant. Therefore, on the bases of the findings, this study suggests that managers should focus on mitigating vertical agency crises while concurrently strengthening board independence.

Board Structure and Financial Performance of Manufacturing Companies in Nigeria

This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the Diversity of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board Diversity, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the Diversity of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance.

Executive Compensation and Firms’ Financial Performance: Analytical Approach in Nigeria

This study ascertained the relationship that exists between executive compensation and firms’ financial performance in Nigeria. The data for the study was gathered form the annual reports and accounts of companies quoted on the floor of the Nigerian Stock Exchange for a period of nine years ranging from 2014 to 2022. From the regression result conducted it was found that Executive compensation had a positive relationship with firm performance when proxied using returns on equity and return on asset. It is however negatively related with Tobin’s Q Firm size had a positive relationship with return on asset, Tobin’s and return on equity; Board independence had a negative impact on firm performance (return on asset and return on equity) for the measures of performance but was positively related with Tobin’s Q. Leverage was found to exhibit a negative relationship with firm performance. Leverage had a negative relationship with firm performance (return on equity and Tobin’s Q). Therefore, it is recommended that executive compensation is a vital element that should not be undermined in an organization due to the fact that it has been established from the analysis carried out that this variable is a key driver of financial performance in organizations. Keywords: Executive compensation, firm performance, Firm size, Leverage, and board Independence

Financial Innovations and Financial Performance of Listed Deposit Money Banks in Nigeria

This study examines the relationship between financial innovations and financial performance of listed deposit money banks in Nigeria. This study adopted expost-facto research design. Census sampling techniques was used to adopt all the 25 deposit money banks quoted in the Nigerian stock exchange. Secondary data was collected from all listed Deposit Money Banks in Nigeria between the period 2010 to 2021. The data was extracted from the annual reports of the listed Deposit Money Banks in Nigeria. Correlation analysis was used to measure the relationship between variables. Specifically, the researcher used multiple regression analysis to establish if there is relationship between the independent variables and the dependent variable. The study revealed that Automated Teller Machine (ATM) has a negative but significant relationship with Financial Performance (FP), Point of Sales(POS) has a positive and significant relationship with FP, electronic mobile transaction (MOBILE) has a positive but non-significant relationship with FP and internet web transaction (WEB) has a negative and non-significant relationship with FP. Based on the findings, the research recommends that banks and ATMs manufacturers should be more concerned about the security of banking machines and that they should collaborate with telecommunication network providers and security agents to checkmate and prosecute hackers and other internet fraud stars so as to reverse the negative effect of ATM and internet web transactions on deposit money banks’ financial performance in Nigeria. Banks should also improve service quality and customer responsiveness in cases of lost or stolen cards, frauds, and other customer complaints in relation to point of sale to enhance the performance of deposit money banks in Nigeria.

Does Corporate Social Responsibility Affect Organizational Financial Performance in Nigeria?

The financial performance of multinational firms is usually affected by the business environment in which they operate. This environment brings challenges especially socio-culturally related factors. This study aims at examining the effect of corporate social responsibilities on organizational financial performance in Nigeria. The study adopts ex post facto research design and purposive sampling methods. 30 quoted firms actively trading between 2018 and 2022 are selected and data were collected from their financial statements. Panel least square was used as method of data analysis. The t-test was used as test of hypotheses and was measured against a standard z-score value of 1.96. The results of the study show that corporate social responsibility positively affect organizational financial performance in Nigeria. The study therefore recommends that multinational organizations should make efforts to create a close relationship with its immediate environment by investing in its environment and use strong corporate governance policy to strengthen continuity.

Effect of Financial Technology on Financial Performance of Deposit Money Banks in Southwest, Nigeria

Financial Technology in the recent times, has significantly intensified competition in Nigerian Banking Industry, hence Deposit Money Banks (DMBs) face persistent pressures from a wide and diverse range of competitors, while the regulatory environment becomes less protective of the financial institutions. This study therefore examined the effect of financial technology on the financial performance of deposit money banks in southwest, Nigeria. The study employed an Ex-Post Facto research design to establish functional relationship among customers and employees of the DMBs branches in the South West geopolitical zone in Nigeria. The descriptive statistics, which involved the current levels of financial performance on deposit money banks showed an improvement in the return on assets due to the deployment of financial technology with the weighted average of 216 or 35.94% while more than 97% of respondents perceive the level of improvement in equities of banks in Nigeria as moderate followed by the rate of improvement in net income margin of banks with weighted mean of 192 or 31.9%. The empirical results showed that the deployment of automated teller machine, mobile banking, internet banking and point of sales on the financial performance of banks have significantly and positively improve banks’ return on asset, equity and the net income. This is an indication that the financial performance of Nigerian banks’ are highly sensitive to changes in the alternative banking channels as 1%, rises in automated teller machine increase the return on asset by 0.18%. In the same vein, increase in mobile banking to the tune of 1% raised the level of return on asset by 0.29%. Thus the study concludes that the deployment of mobile banking and internet bank drive virtually all the indicators of bank financial performance in Nigeria. However, the paper recommends that, the deployment of mobile banking was more pronounced, and particularly in the area of banks’ return on equity although all the alternative banking channels contributes to bank financial performance in Nigeria.

Market and Operational Risk Impact on Quoted Deposit Money Banks’ Financial Performance in Nigeria: A Panel Regression Approach

Market and Operational Risk Impact on Quoted Deposit Money Banks’ Financial Performance in Nigeria: A Panel Regression Approach

Corporate Sustainability Reporting and Financial Performance of Deposit Money Banks in Nigeria

This study investigates the relationship between corporate sustainability reporting and the financial performance of deposit money banks in Nigeria. The specific objectives of the study were to determine whether economic, social, and environmental sustainability reporting affects financial performance in Nigeria using return on assets (ROA) as a measure of corporate financial performance. The study's data were sourced from annual reports of sampled banks from 2013-2022. Using the panel least squares regression technique, the study found that economic and environmental sustainability reporting has a negative and positive insignificant effect on the performance respectively. However, social sustainability reporting was found to be negative and statistically significant. Based on the findings, the study recommends amongst others that enabling legislation should be put in place to mandate enhanced sustainability practices among all deposit money banks in Nigeria as well as facilitate meaningful evaluation and measurement of economic, social, and environmental impacts in all areas of bank operations in Nigeria.

Corporate Governance and Debt Financing of Listed Manufacturing Firms in Nigeria

The study assessed the relationship between corporate governance and capital structure of listed manufacturing firms in Nigeria. The study employed secondary data covering a period of 10 years (2012 – 2021) with sample of 28 listed manufacturing firms. The study obtained annual reports of listed firms from their respective websites and Nigerian Stock Exchange (NSE) Factbook. The data were analysed using pool ordinary least squared and fixed effect model estimation. The findings revealed a significant relationship between the corporate governance and debt financing of the listed manufacturing firms in Nigeria. Specifically, results show that corporate governance variables such as the board size ((t = 2.120 p < 0.05), the board composition (t= 9.288, p < 0.05) and CEO duality (t =2.306, p< 0.005) had positive and significant effect on use of debt funding of listed manufacturing firms in Nigeria. The study concluded that the practice of corporate governance contributes and play significant role in finance decision and enhanced financial performance in Nigeria. Therefore, policy maker should ensure a combination of some mandatory minimum rules and flexibility above the minimum level that will ensure effective financing decision by manufacturing firms in Nigeria.

Corporate Governance and Financial Performance of Listed Firms in Nigeria; Z-Score Approach

This study investigated the effect of corporate governance on financial performance in Nigeria by employing samples from non-finance firms that are listed the floor of the Nigerian Exchange Group for the period 2012-2021. In this study, board size (BODS), board independence (BODI), and board diligence (BODD) were the corporate governance proxies employed in this study. Similarly, corporate financial performance was measured in terms of Altman Z-Score (ZSCO). The population of the study consisted of all the listed non-finance firms and purposive sampling technique was employed to select 70 out of 109 companies. The panel fixed and random effect regression analyses were employed to test the hypotheses of the study. The results obtained from the regression model revealed that board size, board diligence, significantly affect the financial performance of listed firms in Nigeria. However, board independence seemed not to have any significant effect on the financial performance of listed firms in Nigeria during the period under

Effect of Loan Assets Classification on Financial Performance of Nigerian Listed Deposit Money Banks

This ex post facto research study examines the effect of loan asset classifications and the impacts of substandard, doubtful, and loss loans on the financial performance of listed deposit money banks in Nigeria. The studied Population included all 14 deposit money banks listed on the Nigerian Stock Exchange (NSE) within the period of 2008 to 2019. The study purposively sampled 10 out of the 14 banks for the purpose of data collection and employed multiple regression analysis of data collated from the annual financial reports of the sampled banks within the studied period. In view of the absence of cross-section effect in the dataset, the pooled independent OLS regression was chosen for analysis and interpretation, revealing that the combined outcome of substandard (SSL) and loss loans (LL) variables are significantly related with the financial performance of listed deposit money banks in Nigeria, while doubtful loans show an insignificant effect on financial performance. The study concludes that bank loans are strong predictor of financial performance in Nigeria, thus it is recommended that banks should eradicate weaknesses such as underwriters’ initial failure to adequately assess borrower risk level prior to issuing loans and to subsequently successfully enforce repayment of the loans.

Accountability Process Analysis in the TSA Policy Implementation, the Perception on the Public Sector Financial Performance in Nigeria

Accountability Process Analysis in the TSA Policy Implementation, the Perception on the Public Sector Financial Performance in Nigeria

Interrogative of Enterprise Risk Management Practices on the Banks’ Financial Performance in Nigeria

Deposit money banks play critical roles in any economy through their financial intermediation and their financial performance is of great importance to various stakeholders. Over the years, the banking sector has been experiencing unstable financial performance that often results in to collapse of some of the deposit money banks. Some of the challenges attributable to the banks fluctuating financial performance include the absence of adequate and effective enterprise risk management practices, unethical practices, liquidity crises and unnecessary government inferences. This has resulted in poor financial performance in terms of their Return on Assets, Tobin's Q, Net Profit margin and Earnings Per Share, among others. The study adopted an ex-post facto research design and content analysis. The population of the study was all the 12 listed deposit money banks in Nigeria in the Nigeria Exchange Group for the period 2007 – 2021. A total enumeration technique was adopted for the study. Data were sourced from the audited annual reports of the selected deposit money banks. Data were analyzed using descriptive and inferential statistics. The findings revealed that enterprise risk management has a significant effect on return on assets, Adj.R2 = 0.218, F (7, 172) = 89.01, P < 0.05). Enterprise risk management has a significant effect on Tobin's Q, Adj.R2 = 0.3367, F (7, 172) = 142.80, P < 0.05). The study concluded that enterprise risk management impacts the financial performance of deposit money banks in Nigeria. The study recommended that the Management of banks should put in place an independent Board Risk Management Committee as well as a functional Risk Management Committee with a versatile Chief Risk Officer that will ensure the effective implementation of enterprise risk management policies and processes, as its effective implementation will minimize operational, credit, market and liquidity risks, thereby enhancing banks' financial performance for the benefit of various stakeholders.

Effect of detection and control of financial fraud on performance of Nigerian deposit money banks - a conceptual review

The growing upsurge of fraud and forgery circumstances in the banking sector in modern times incited this study. This problem is considered important given the role of banking sector in the economic growth and development. This paper reviewed the current scenario on financial fraud detection and prevention in Nigerian deposit money banks. The main aim is to examine the connections between acts of violence, responses, and the roles of deposit money management in Nigerian banks. The study made use of previous works that were drawn from recent journal articles on related concepts such as textbooks, and earlier academic investigations relevant to the topic. Literatures pertaining to the specific topics were reviewed using the content analysis technique. The study's conclusion is that crime has a detrimental impact on DMBs in Nigeria and that it is important to handle fees, checks, account openings, and securities carefully to prevent fraud against financial institutions, especially DMBs in Nigeria. The conclusion will be supported by a review of relevant literature and empirical review. However, it was concluded that control measures have considerably boosted the deposit money institutions' financial performance in Nigeria. The inclusion of fraud control measures has never been deceptive in Nigeria. It is suggested that there should be a strong connection between all stakeholders in fraud management and Deposit Money Banks in relations to fraud detection and control. Direction for future research was also covered.

The Moderating Influence of Intellectual Capital on the Relationship Between Corporate Governance Attributes and Financial Performance in Nigeria

Corporate governance and intellectual competencies can provide corporate attractiveness and accomplishment. Hence, this study investigated the moderating effects of intellectual capital on the relationship between corporate governance attributes and the financial performance of listed companies in Nigeria. The study adopted ex post facto and correlational research designs. The population of the study was twenty-one (21) listed consumer goods manufacturing firms as of year-end 2020. The study used a census approach to determine a sample size of twenty-one (21) firms. Secondary data from the published annual financial reports of the sampled firms were used for data analysis. Descriptive statistics, correlation coefficient and multivariate analysis were used. The regression analysis revealed that board size has a positive and insignificant relationship with the return on equity of listed consumer goods manufacturing firms in Nigeria; Board independence has a positive and significant relationship with the return on equity of listed consumer goods manufacturing firms in Nigeria; board compensation has a negative and significant relationship with return on equity of listed consumer goods manufacturing firms in Nigeria; board diligence has a positive and significant relationship with return on equity of listed consumer goods manufacturing firms in Nigeria and intellectual capital positively and significantly moderates the relationship between corporate governance mechanism and return on assets of listed consumer goods manufacturing firms in Nigeria. The study concludes that intellectual capital moderates the relationship between corporate governance attributes and the financial performance of listed consumer goods manufacturing firms in Nigeria. The study recommends among others policymakers from listed firms should emphasise good corporate governance practices with quality intellectual input as a means of improving the level of financial performance. Hence, the implementation of corporate governance practices should be in terms of board accountability and transparency through quality human resources for the financial performance of listed firms in Nigeria.

Effect of Board Religion Diversity on Financial Performance of Quoted Deposit Money Banks in Nigeria

The effect of board diversity, like, gender, ethnicity, etc on financial performance have been widely studied. However, very few research have been carried out in the area of the the effect of religion diversity on financial performance. This study examines the effect of board religion diversity on financial performance of quoted deposit money banks in Nigeria. The population comprises of all the deposit money banks in Nigeria while thirteen (13) quoted deposit money banks were sampled based on their being listed on the Nigerian Exchange Limited all through the study period of 2010 to 2021. The data were analyzed using Shapiro-Wilk Normality, Pearson correlation, Heteroskedasticity Breusch-Pagan Test and Breusch-Pagan Lagrangian Multiplier Test while hypotheses were tested using Pooled Ordinary Least Square regression model. The results show that religion diversity (RD) has a significant positive effect on financial performance (proxied by return on assets (ROA)) of quoted deposit money banks in Nigeria for the period under review. The study recommends that the regulators – Central Bank of Nigeria (CBN) and boards of deposit money banks in Nigeria should encourage different religious practices on the boards of banks to enhance their financial performance in Nigeria.

ACCOUNT RECEIVABLE AND INVENTORY CONVERSION MANAGEMENT AS DETERMINANTS OF CORPORATE FINANCIAL PERFORMANCE: EVIDENCE FROM PUBLICLY QUOTED NIGERIAN FIRMS

In this study, we examined whether account receivable and inventory conversion management (ICM) serve as a determinant of corporate financial performance. Ex-post facto design was used and sample of seventy-six (76) firms across various non-financial firm’s sectors were employed. Panel data were obtained from 2011-2019; data obtained were analyzed via descriptive (mean, median, standard deviation, minimum and maximum values, kurtosis, skewness and correlation matrix), diagnostic statistics (variance inflation factor, and unit root) and inferential (fixed and random effects model and Hausman specification) statistical tool. Findings of fixed and random effect panel regression revealed that account receivable management (ARM) significantly affects return on asset (Wald Ch2 = 24.63; prob. Chi2 = 0.000 < 0.05) while relationship between inventory conversion management (ICM) significantly affects return on asset (Wald Ch2 = 9.55; prob. Chi2 = 0.0085 < 0.05). Based on the findings, it was recommended that management should enhance accounts receivable and ICM practices as it is vital to enhancing financial performance of non-financial firms. Also, management should initiate appropriate steps to maintain the level of purchasing and sales management in order to reduce losses due to poor inventory controls and to optimize efficient utilization of resource for production. This study contributes to knowledge by filling the gap in literature on the effect of account receivable, ICM and corporate financial performance in Nigeria.
 Keywords: Account receivables, Inventory management; Inventory conversion management;
 Corporate performance; Cost of capital; Return on asset; Nigerian firms
 JEL Classification: G31; M11; M10

Effect of Corporate Social Responsibility on Financial Performance in Nigeria

The study examined corporate social responsibility on financial performance of banks in Nigeria by using earning per share, gross earning and profit after tax as measures of financial performance of banks in Nigeria. The study design was ex-post-facto. Pearson correlation and simple regression analysis were the major statistical tools used for the analysis through the application of SPSS version 20.0 and E-View 8.0 software packages. Correlation results showed that whereas the relationship between corporate social responsibility and earning per share was positive but insignificant, it showed strong, positive and significant relationships with gross earning and profit after tax respectively. Similarly, corporate social responsibility expenditure was found to have insignificant effect on earnings per share, it has significant effect on gross earning and profit after tax of the banks in Nigeria. The study recommends among others that corporate organizations should endeavor to give more to the society in CSR and leverage it to enhance the financial performance of their businesses in the country.

Empirical evidence of the relationship between terrorism and firm financial performance in Nigeria

PurposeThis paper investigates the relationship between terrorism and firm financial performance in Nigeria. The country has become one of the riskiest countries in Sub-Saharan Africa due to the intensity of recent terror attacks. Also, there is a growing focus on the importance of firms, given firms' economic contribution towards growth, employment and economic and industrial transformation. However, no study has tried establishing a relationship between terrorism and firm financial performance. Therefore, providing empirical proof of this relationship is the primary purpose and motivation of this paper.Design/methodology/approachData from the World Bank Enterprise Survey (WBES) and the Global Terrorism Database (GTD) were used for this study. The baseline analysis was estimated using the pooled ordinary least squares regression technique. For robustness checks, the fixed effects technique was used to control for heterogeneity across the authors' sample of firms and unobserved factors that are time-invariant, while the IV technique was employed to control for any potential endogeneity.FindingsThe results obtained from the regression analysis were robust to different econometric estimations and approaches. Terrorism was found to have a consistent and significant negative impact on firm financial performance. Furthermore, the marginal effect of terrorism on firm performance was more substantial when state-level terrorism data were used.Originality/valueStudies often focus on the impact of political instability (which is a measure subjectively based on perception) on foreign direct investment or on the activities of multinational corporations. The authors' research is new in supplying evidence of the relationship between terrorism (an objective measure) and the financial performance of manufacturing firms in Nigeria. Methodologically, this study also employed spatially distributed incidents of terrorism within the country. This is because incidents of terrorism are often spatially distributed within a country (i.e. province or state). This will provide new evidence of the effects of within-country variations of terrorism on firm financial performance.