Quoted Companies Research Articles

Investing Cash Flow Volatility and Firm Stock Market Value of the Companies Quoted at the Nairobi Securities Exchange

There are a multiple number of determinants of investor perceptions about firm value which in turn influence demand for and supply of firm securities and therefore market prices and the corresponding firm market value as indicated by firm market capitalization. Extant literature reveals that it is not clear whether or not the volatility in the investing cash flows of a firm is priced information risk factor for companies listed at the Nairobi Securities Exchange (NSE). This lack of literature consensus arises from the conflicting theoretical and empirical evidence on the influence of such volatility on firm market capitalization. This study sought to establish if the annual fluctuations in cash flows from investing activities affects the market values of companies listed at the NSE. Market value was measured using the firm market capitalization ratio while the investing cash flow volatility was based on the 3-year rolling standard deviations of the investing cash flow ratios. The relevant theories that try to explain the interlinkage between investing cash flow volatility information with firm stock market valuations are the functional fixation theory; the random walk theory; the efficient market hypothesis and the MM value relevance theory. The research was undertaken as a census quantitative descriptive study based on all the 66 listed companies at the NSE. From these, 45 met the secondary data requirements resulting in 450 firm year observations for the 2011 to 2022 study period. Diagnostic tests for normality, heteroscedasticity, autocorrelation and model specification tests were undertaken. Hausman specification test provided a preference for the fixed effects model that was then used in the panel regression analysis. P-value and t-test were used in hypothesis testing at 95% confidence interval. The results of the study revealed that the volatility of the cash flows from investing activities had a negative influence on firm market valuation for the firms quoted at the Nairobi Securities Exchange. The findings support the MM value relevance theory; the Efficient Market Hypothesis and the Random Walk Theory but fail to support the Functional Fixation Theory. Since the study finds that the volatility in the cash flows from investing activities to be a priced information risk factor at the NSE, it recommends that more disclosures on information about cash flows in general and cash flows from investing activities in particular should be reported in the financial statements of listed companies in Kenya to aid investors in their investment decision making.

Empirical Relationship between Board Size, Board Tenure on Corporate Risk Management: Evidence from Nigerian Quoted Companies

The fundamental goal of this article is to look into the link between board size, board tenure, and corporate risk management. amid the background of the modern portfolio theory. The study population consists of 328 companies listed on the Nigerian Stock Exchange as at December 2020. A sample of 30 firms was scientifically selected for the study. The analysis was carried out using dataset from 2014 to 2020, comprising of 210 observations. The panel data regression analysis is the technique for data analysis. The technique was chosen because of its ability to enhance data points while still controlling for individual variation. The research uncovers a positive and insignificant relationship between board size and corporate risk management. While board tenure had a positive and significant relationship on corporate risk management. Firm size, as a control

Intellectual capital and market performance of Nigerian Companies

This study is carried out on intellectual capital efficiency and the market value of Nigerian quoted companies. The specific objectives were to: determine the influence of human capital efficiency on market value of the listed Nigerian companies; examine the influence of structural capital efficiency on market value of the listed Nigerian companies; and evaluate the influence of capital employed efficiency on market of the listed Nigerian companies firms in Nigeria. The data were sourced from 2018 to 2022 annual audited accounts of the 117 companies quoted on the Nigerian Exchange Group. The regression technique was employed to analyse the data. The findings showed that capital employed efficiency positively influenced market value throughout the five years but the human capital efficiency and structural capital efficiency have mixed results. Human capital efficiency and structural capital efficiency were both positively and negatively influenced market value of the sampled Nigerian companies for the periods of observation. The study thus concluded that intellectual capital influenced the market value of the sampled Nigerian companies and provided the recommendation that the sampled companies should improve their investments on intellectual capital resources (such as staffs’ training, staff welfare) and physical assets.

Effects of Information Relevance of Market Share Price of Quoted Companies in Nigerian Exchange Group: Basic Materials Sector

The purpose of this study is to analyze the impact of financial data on the stock prices of listed firms in the basic materials sector of the NGX. The particular goals are to analyze the market share price of basic material companies listed on the floor of the Nigeria Stock Exchange from 2010 to 2017 in relation to EPS, dividends per share, and return on assets. Secondary information was gathered from the NGX's audited financial statement disclosures. E-view statistical software was used to do regression analysis for inferential statistics on the hypotheses. The results of this analysis indicate that at the 5% level of statistical significance, Return on Assets has a positive and statistically significant influence on the market share price. Market share price is correlated with earnings per share and dividends per share to a lesser extent, although not directly. Overall, there was a positive correlation between the dependent and independent variables due to the significant impact of Return on Asset on Market Share Price. Therefore, it is advised that basic material enterprises in Nigeria enhance the quality of their financial reporting and increase the transparency of their accounting practices because of the substantial impact that accounting information has on market price.

The Role of Environmental Policy in Influencing Governance and Sustainability Practices Among Nigerian Quoted Companies: A Proposed Framework

Purpose: This study aimed to introduce a moderator to strengthen the relationship between institutional factors and corporate managers’ immersion as governance attributes toward firms’ sustainability initiatives. Theoretical framework: A proposed model based on the developed hypothesis was formulated based on empirical and theoretical facts to support the concepts of institutional and legitimacy theories. Design/methodology/approach: The research uses a quantitative method that examines the quoted companies rated and ranked by Nigeria’s World CSR Consensus rating, including all Financial and Non-Financial sectors. It also assesses the companies’ roles in encouraging friendly environmental practices. Findings: The consequence of this report shows that Just 26 corporations have occupied a position on corporate social responsibility (CSR) initiatives, with Access Bank having the highest significant value of 99% and UAC Nigeria Plc having the lowest value of 1%. Additionally, only 90 out of 156 Nigeria’s publicly traded firms have been assessed and recognized by CSRHUB, having the lowest percentage. Research, Practical & Social implications: since there are no standard ways of enhancing the institutional factors and corporate managers’ immersion rapport to add to the body of knowledge, Environmental Policy is proposed and recommended as essential in shaping future planning and sustainability practices. Originality/value: To strengthen and increase the sustainability practices success of these firms, they must pay more attention to the environmental policies and the factors that influence them. Further studies might consider improving the research by analyzing the variables in the proposed model based on the hypothesis formulated and the time-variant.

Research on the Influence of Market Value Fluctuation on Innovation Decision of Listed Enterprises from the Perspective of Loss Aversion

Concerns regarding publicly traded companies' R&D investment have long existed among academics domestically and overseas. Scholars have conducted much research on the R&D investment of enterprises from different angles. This study starts from the perspective of market expectation and loss aversion, taking the data of Chinese quoted companies from 2011 to 2020 as a sample and using the empirical analysis method to research the impact of changes in market value on quoted companies' innovation decisions. Robustness tests effectively corroborate the findings of the study, which found a substantial positive association between changes in the market value of listed businesses and the degree of innovation investment. Additionally, this study conducts a group regression test on the R&D investment growth rate (RDI) of state-owned companies (SOEs) and non-state-owned firms using the two explanatory variables of total market value growth rate (RDI) and Tobin's Q value (Tobin's Q) (NSOEs). It is discovered that NSOEs are more vulnerable to market capitalization change than SOEs are, and the listed businesses' intentions to innovate are influenced by changes in market capitalization through the loss aversion mechanism.

Financial Performance and Earnings Per Share of Consumer Goods Manufacturing Companies Quoted in Nigeria

Positive and continuous growth in Earnings per Share (EPS) has always been the desire of every investor, especially equity investors, and in measuring it, Financial Performance (FP) has been viewed to have a great impact on EPS, thus the aim is to examine the impact if any and to what extent that financial performance has on EPS. The adopted research design for this study was Ex-post facto with the objective of examining the effect of FP on EPS of Consumer Goods Manufacturing Companies (CGMC) Quoted in Nigeria. The population used for this study comprises 12 CGMC quoted on the Nigeria Exchange Group (NGX) as of April 30, 2021, while the size of the sample was purposely selected. The audited annual reports provided the data used for the companies that were sampled for the given period of 11 years (2009 – 2019). The data relied on the fact that the financial statements statutory audit in the annual report has been audited, guaranteeing its validity and reliability. The data were analyzed using descriptive and inferential statistical tools. The outcome of the test showed that the effect of ROA on EPS is positive and significant but ROE, on the other hand, has an insignificantly negative effect on the EPS of CGMC Quoted in Nigeria with a probability outcome of 0.0015 and 0.9487 respectively. The results of the test attest to these and are as follows: R² = 0.077411, Adj.R² = 0.063107 and F-Statistics = 5.411958, and P-value of 0.005534. The Study concluded that FP has both positively significant and negatively insignificant effects on the EPS of CGMC Quoted in Nigeria. The recommendation of this study is that equity investors and financial analysts should look beyond FP in taking their investment decisions.

Board Structure and Financial Reporting Quality in Quoted Non-Financial Firms in Nigeria

This study investigated board structure and financial reporting quality among quoted non-financial companies in Nigeria. The broad objective was to determine the relationship between, board independence, board expertise, board meetings and audit committee size and financial reporting quality among quoted companies in Nigeria. The study employed ex-post facto research design, covering a period of six years (2013 to 2018). The population size is one hundred and fourteen (114) non-financial companies in Nigeria, while fifty-nine (59) quoted companies constituted the sample size. Content analysis of financial statements of sampled companies were carried out and data were analysed using descriptive and inferential statistics, like correlation matrix and panel least square regression. The study found that board independence, board expertise and audit committee size have significant and positive relationship with financial reporting quality, which by implication, board independence, board expertise and audit committee size were critical factor enhancing financial reporting quality among quoted companies in Nigeria. The research also found board meetings to have negative relationship with financial reporting quality.The study recommended that board of companies should consists of more independence board members made up of male and female with professional financial expertise capable of enhancing financial reporting quality. Keywords: Board independence, Board expertise, Board meeting, Audit committee size, financial reporting quality, Panel Least Square Regression

Accounting Ratios and False Financial Statements Detection: Evidence From Nigerian Quoted Companies

The broad objective of the study was to investigate accounting ratios and false financial statements detection. The study was a descriptive survey in design. This study employed pooled data from firms listed in the Nigerian Exchange Group PLC, covering a period of 5 years (2017- 2021). A total of 239 firms quoted on the Nigerian Exchange constituted the population of the study. The study relied on secondary data. Historical data were obtained from the annual financial reports of accounts of 10 purposively sampled service sector firms. Data obtained were analysed using descriptive statistics, Pearson correlation and Pooled Data Binary logit regression analysis. The findings of the study revealed that profitability has a positive relationship with false Financial Statement detection. However, profitability and leverage ratios do not significantly relate to the probability of Financial Statement fraud occurrence. Based on the findings, it was recommended that the firm’s financial managers should note with caution, the negative relationship between financial ratios and the firm’s profitability. Hence, if the purpose of financial management is to improve fraudulent detection, then such efforts must be improved in using financial ratios to detect fraudulent financial reporting.

Asset Valuation and Firm Capitalization of Consumer Goods Manufacturing Companies Quoted in Nigeria

Capitalization enables firms from around the world to be able to evaluate how effective the investments of any company are thus making it an important variable to be considered when making an investment decision. To ascertain a firm's market value or capitalization, assets need to be valued among other measures that need to be undertaken. Thus necessitating this research work on Asset Valuation and Firm Capitalization of Consumer Goods Manufacturing Companies Quoted in Nigeria. For this study, the adopted research design was Ex-post facto. The study’s main objective was to investigate asset valuation's effect on Consumer Goods Manufacturing Companies’ capitalization. The study’s population is 52 manufacturing companies as quoted on the Nigeria Stock Exchange as of 31st December 2020 out of which 12 were purposively selected. Audited annual reports of the companies that were sampled formed the source of Data collected for this study for a period of 10 years (2011 – 2020). Data for this study were analyzed with the aid of descriptive and inferential statistics and the outcome showed that asset valuation significantly affects firm capitalization. This is seen in the Adj.R2 = 0.312126 and F-Statistics = 26.41023 and P-value of 0.000000 values. The conclusion of this study thus is that asset valuation has a significant effect on firm capitalization Consumer Goods Manufacturing Companies Quoted in Nigeria. The study recommended that firm Managers should give due attention to asset management and valuation to ensure a positive and significant impact on firm capitalization while investors are advised to ensure that the assets of a firm are properly valued to ensure fair firm capitalization before embarking on investment commitment.

Credit rating agency response to appointment of female audit partners: Evidence from the UK

We study the impact of appointing women as audit partners from a credit rating agency perspective. We investigate whether credit rating agencies value the appointment of women to audit partner positions differently than when men are appointed. This study uses a United Kingdom (UK) balanced panel data of 2472 firm-year observations of public quoted companies from 2009 to 2016 and analyzes how credit rating agencies respond to such appointments. We find a more positive credit score reaction after appointment of a female audit partner than that following the appointment of a male audit partner. This finding suggests that, from a credit rating agency perspective, there seems to be a business case for a particular gender when it comes to appointing audit partners.

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs

The study examined the effect of the International Financial Reporting Standards [IFRS] implementation on the corporate governance of Nigerian banks. The specific objectives of the study were to examine the effect of IFRS implementation in promoting corporate accountability by banks; the effect of IFRS implementation in strengthening the financial regulatory framework of banks and the effect of IFRS implementation in enhancing corporate disclosure of banks. The study adopts the descriptive survey research design. The sample comprised 144 respondents in banks in the chosen geographical area. The results showed that IFRS implementation promoted corporate accountability in Nigerian banks. There is a significant effect of IFRS implementation in strengthening the financial regulatory framework of banks. Lastly, IFRS implementation has enhanced the corporate disclosure of banks. The study recommends that CBN should further enact rules that promote accountability in the banking sector. Stiff penalty for late default on issuing annual reports, not allowing any single individual to acquire more than 20% shareholding, among others. The sustainability disclosure guideline by the NSE to promote corporate social responsibility among quoted companies should also be enforced for banking institutions. The harmonisation of the diversified corporate governance codes should be further revisited. A clear distinction between the duties and responsibilities of the CBN and FRC may further avoid overlap of functions which may lead to friction.

The Effect of Audit Quality on The Financial Performance of Listed Deposit Money Banks in Nigeria

This study explored the influence of audit quality on the financial performance of listed deposit money banks in Nigeria. It successfully identified a significant and positive relationship between audit quality, represented by audit fees and audit firm specialization, and the performance of the sampled banks measured using ROA (Return on Assets) and EPS (Earnings per Share). The research collected annual data from 2009 to 2021, sourced from the annual reports and accounts of non-financial quoted companies in Nigeria. To address potential endogeneity issues, the study employed feasible generalized least square regression, aligning with the results of diagnostic tests. The analysis outcomes indicated that audit fees had a positive and statistically significant impact on the return on assets and earnings per share of the sampled banks. Similarly, audit specialization exhibited a positive and significant influence on both return on assets and earnings per share. Consequently, the study confirmed a noteworthy positive relationship between audit quality and the performance of Nigerian listed Deposit Money Banks. In light of these findings, the study recommends that regulatory authorities in the sector encourage banks to engage specialized audit firms.

Ownership structure and qualitative information disclosures in nigerian quoted companies

Ownership structure and qualitative information disclosures in nigerian quoted companies

Incidence of Unclaimed Dividends: A Panel Data Analysis of the Role of Quoted Companies in Nigeria

The objective of this paper is to examine the incidence of unclaimed dividends and the role of quoted companies in Nigeria. The rising trend of unclaimed dividends has been a serious concern to government, stakeholders, and supervisory authorities like the Securities and Exchange Commission, (SEC), and Nigerian Stock Exchange (NSE). There has been some policies put in place to reduce unclaimed dividends over the years. Some of the policies and measures include Companies and Allied Matters Act (CAMA), Investment and Securities Act (ISA), Central Securities and Clearing System (CSCS), Bank Verification Number (BVN), and e-dividend payment system respectively. Despite, these measures, unclaimed dividend figures have risen from 30 billion Naira in 1996 to 130 billion Naira in 2017. Studies done to address unclaimed dividends attributed various factors, some of which are: investors not giving their correct addresses, non-delivery of dividend warrants to investors, and Registrar not doing their work. However, one area that has not been addressed is the role of quoted companies in the rising trend of unclaimed dividends in Nigeria. Some large quoted companies have set up registrars but are really departments, with no separate boards from the mother firm. In Nigeria, registrars are statutorily charged with the processing of dividends from the time a quoted firm declared dividends and when the dividends fund is finally transferred to the registrars in Nigeria. But an emerging trend that has not been addressed is that quoted companies are now warehousing unclaimed dividends as reported by the reports of Securities and Exchange Commission (SEC). In other words, the dividends that have been declared and paid are still held and managed by the same quoted companies that paid the dividend. It is this trend that has prompted SEC to make proposal to the National Assembly for the review of CAMA law, to prevent quoted companies from exploiting the law. The quoted firms hitherto took advantage of the loop hole in CAMA to manage their already declared and paid dividends, months after payment through their owned established registrars. Though, about six shareholders associations have rejected the intervention of SEC in unclaimed dividend issues. But one of the principal functions of the SEC is to ensure is investor’s protection. It is against this background that the study investigate the quoted companies as a contributory factor in the rising trend of unclaimed dividends in Nigeria. The study used panel data analysis to run the quarterly data of unclaimed dividends amount with the quoted companies, the unclaimed dividend amounts with the registrars responsible for managing dividends, and the aggregate unclaimed dividends amount from 2012 to 2019. The study found that there was no difference between the role of quoted companies and the registrars in terms of managing unclaimed dividends in Nigeria. The study recommends a review of government policy that will continuously audit and sanction quoted companies that manage the unclaimed dividends through their subsidiaries or registrars and use it as working capital.

FINANCIAL PERFORMANCE AND COMPANIES INCOME TAX OF LISTED COMPANIES IN NIGERIA

Taxes are compulsory levies that are regularly imposed and as a rule, not designated for a special purpose. The study examined the effect of financial performance and companies income tax of quoted companies in Nigeria. The study adopted ex-post facto research design. The population of this study was all quoted financial and non-financial companies which as at 2019 on the Nigerian Stock Exchange (NSE) was 173 for the period 2006 – 2020 and the sample size was 30 using stratified sampling technique and quota system. Data were sourced from the annual reports of the sampled quoted companies for the study. Data were analyzed using descriptive and inferential statistics. The findings revealed that financial performance has significant effect on companies income tax of the sampled quoted companies in Nigeria (Adj. R2 = 0.789, F(4, 445 ) = 1594.78, P<.05). Firm size was also introduced as a moderating variable and the results also show that it has significant effect on companies income tax in Nigeria (Adj. R2 = 0.36, F(4, 445 ) = 50.17, P<.05. The study concludes that financial performance has a significant effect on the companies income tax of quoted financial and non -financial firms in Nigeria. The study recommends that the management should pay adequate attention and care to their earnings and net profit by improving on their capital employed to further improve the effective tax rate of their companies and Companies should maintain adequate firm size for their operations as it can enhance their performance and will drive corporate taxes

Effect of corporate governance on corporate social responsibility in Vietnam: state-ownership as the moderating role

Purpose This study aims to investigate the association between corporate governance (CG) and the corporate social responsibility (CSR) information disclosure as well as the moderating role of state-ownership between CG and CSR disclosure. Design/methodology/approach To examine the relationship between CG and CSR disclosure, this study used the feasible general least squares and generalized method of moments method on a sample of 165 non-financial quoted companies over the 2015–2018 period, which account for about three-fourths of the Vietnamese stock exchange. Findings The findings suggest that enterprises with smaller board size consisting mainly of independent directors have a higher CSR disclosure level. Moreover, when the chief executive officer is concurrently the chairman of the board, the level of CSR disclosure falls. Additionally, the moderating role of state ownership enhances CSR disclosure. Research limitations/implications The empirical results of this study form a solid foundation for policymakers and other stakeholders’ decisions in investing or establishing policies. Originality/value This study provides empirical evidence on the relationship between CG and CSR disclosure in Vietnam – a developing country with no legal requirement on CSR disclosure. Moreover, this study emphasizes the moderating role of state ownership between CG and CSR disclosure, which clarifies the role of state ownership in establishing CG mechanisms.

Corporate Governance on Stakeholders’ Obligations of Non-financial Firms Quoted in Nigeria: Moderating Effect of Firm Size and Liquidity

Entities exist to create value for, not only their shareholders but all groups of stakeholders that affect and are affected by the entities’ activities. Studies have however revealed that companies do fall short of meeting stakeholders’ obligations for reasons not unconnected with ineffective corporate governance mechanisms. This study examined the effect of corporate governance on stakeholders’ obligations of non-financial quoted companies in Nigeria and the extent to which firm size and liquidity moderate this effect. The study adopted ex-post facto research design and the population comprised 73 companies from the non-financial sectors that have faced financial distress in the period of consideration and shall be classified as failed or financially distressed firms. Using the purposive sampling technique, a sample of 52 delisted or suspended firms were selected for the study using stratified and purposive sampling techniques. The study used data extracted from the annual reports of the sampled companies covering 2008 to 2019. The finding revealed that corporate governance had a significant effect on stakeholder’s obligations (Adj R2 = 0.117, Wald-Test = 32.57, p = 0.000). The study further shows that firm size and liquidity significantly moderated the effect of corporate governance on the stakeholders’ obligation of non-financial firms quoted in Nigeria. On the basis of these empirical findings, the study recommended that the management of non-financial quoted firms in Nigeria should properly consider their size and liquidity positions in their corporate governance policy.

Does Modigliani and Miller Relevance and Irrelevance Theory of Capital Structure Apply Among Non – Finance Quoted Companies in Ghana?

Does Modigliani and Miller Relevance and Irrelevance Theory of Capital Structure Apply Among Non – Finance Quoted Companies in Ghana?

Does Modigliani and Miller Relevance and Irrelevance Theory of Capital Structure Apply Among Non – Finance Quoted Companies in Ghana?

This study tests the applicability of Miller and Modigliani relevance and irrelevance theories for a set of 15 companies in Ghana using that for the period 2010 to 2019. The test procedure invoved examining how debt to equity ratios affect the value of the firms in the market, including how tax shield provided from debt accumulation improves the firms’ value. The result from the empirical analysis shows that neither the irrelevance nor the relevance theory is prevalent among the quoted firms in the non-finance sector in Ghana over the reference period. Empirical evidence also indicate that debt structure does not infleunce firm value (that is, the use of long term or short term debt pattern does not matter for firm value) among the sampled firms. The result also shows that debt to equity ratio does not influence firm performance. Moreover, tax shield from use of debt is shown to have no significant influence on the changes in firm value STATA computer econometric software package. The estimation was carried out using the Stata 13.0 statistical software.