Asian Journal of Economics, Finance and Management
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Clean Energy, Economic Development and the Distortions in Nigeria’s Petroleum Industry
Get PDFSince energy is essential for both socioeconomic growth and the eradication of poverty, obtaining clean and contemporary energy services is a major challenge facing the African continent especially Nigeria. Currently, between 65% and 75% of Nigerians lack access to electricity. Unless the government diversifies energy sources in the residential, commercial, and industrial sectors and implements new technologies to cut down on energy waste and save money, Nigeria's current energy crisis is certain to continue. This paper examined clean energy and the distortions in Nigeria’s petroleum industry. This paper also examined the availability and spread of these resources, determining that biomass and solar energy were the most widely accessible renewable energy sources on a national level utilizing the qualitative method. Regulatory and legislative barriers, insufficient financial investment, infrastructure constraints, and inefficient grid integration were among the problems that were found. The results of this study revealed that Nigeria should integrate proceeds from petroleum industries to efficiently harness and use its abundant renewable resources in joint public-private collaboration
Impact of Inflation on Stock Market Returns: An Evidence from Banking Stocks of Nairobi Securities Exchange, Kenya
Get PDFInflation significantly influences economic stability and investor confidence, potentially impacting stock market returns. Understanding this relationship is crucial for investors and policymakers, particularly in emerging markets like Kenya, where economic fluctuations are common. This study aimed to investigate the complex interplay between various inflation types and stock market performance within the Kenyan banking sector. Specifically, the study sought to determine the effects of imported inflation, demand-pull, cost-push, and inflation targeting on the stock market returns of commercial banks listed on the Nairobi Securities Exchange (NSE) from 2017 to 2022. The research was guided by the Fisher Hypothesis, Inflation Illusion Hypothesis, Proxy Hypothesis, and Interest Rate Parity Theory. A descriptive study design was employed, utilizing a census survey to collect data from all 11 banking sector firms listed on the NSE. Secondary data on stock market returns were sourced from the NSE and CBK, while inflation data was obtained from the KNBS. Quarterly data over five years were analyzed using SPSS version 21. Findings revealed that hyper-inflation, imported, cost-push, and demand-pull inflations had significant positive effects on stock market returns, while inflation targeting had a moderating effect. The study concluded that demand-pull inflation could lead to higher corporate earnings, while cost-push inflation could increase interest rates as the CBK attempts to control inflation. Imported inflation raised costs for firms relying on imported inputs, reducing profitability. Hyperinflation led to rising stock prices as investors sought to protect their wealth. Successful inflation targeting by central banks resulted in lower interest rates, boosting stock returns. The study recommended that the CBK could use interest rate adjustments to control inflationary pressures. Companies listed on the NSE could implement cost-control measures to mitigate cost-push inflation, while the government could impose tariffs to limit imported inflation. Additionally, diversification was suggested as a strategy for managing hyperinflation's impact on stock returns. The CBK was advised to use monetary policy tools such as interest rates and reserve requirements to regulate inflation and enhance financial stability
Electronic Banking Channels and Financial Inclusion among Small and Medium-Sized Enterprises in Mogadishu, Somalia
Get PDFThis study evaluated electronic banking channels effect on financial inclusion among Mogadishu’s small and medium enterprises. It assessed how mobile, Internet banking, Automated Teller Machine banking, and agency banking affect these enterprises financial inclusion, while allowing for financial literacy role. The following theoretical frameworks; technology acceptance model, financial intermediation theory, and financial repression theory were utilized. An explanatory approach was employed and primary data was used. According to Mogadishu Municipal Authority, there are 5,431 Small and Medium-sized Enterprises from various sectors, including retail, services, and manufacturing which served as the target population of this investigation. 461 respondnets were chosen through sampling of random stratification. Data was gathered using a semi-structured questionnaire. Employing descriptive statistics, correlation, and multiple regression analysis were utilize to interpret the quantitative data. The analysis findings were illustrated on tables and figures. Findings revealed that mobile banking significantly and positively (β=0.2452; ρ=0.000) affect financial inclusion; internet banks also noted a significant positive (β=0.3633; ρ=0.000) effect on financial inclusion; automated teller machine unveiled also significant positive effect (β=0.2167; ρ=0.000) on financial inclusion while agency banking uncovered inverse (β= -0.0997) and insignificant (ρ=0.082) effect on financial inclusion. The survey advocates that the government and financial institutions should collaborate to develop and promote tailored mobile banking solutions specifically designed for SMEs. By addressing the unique needs and difficulties confronted by these enterprises, such as limited access to credit and financial literacy, such initiatives can empower business owners to leverage digital financial services effectively
Strategic Positioning and Sustainable Competitive Advantage at Postal Corporation of Kenya, Nairobi City County
Get PDFThe Postal Corporation of Kenya (PCK) operates in a dynamic environment influenced by technological change, shifting consumer needs, and global disruptions such as the COVID-19 pandemic. PCK faces multiple challenges including a decline in traditional mail usage, financial limitations hindering infrastructure upgrades, obsolete systems, regulatory issues, and workforce attrition. This study evaluated how strategic positioning strategies impact PCK’s sustainable competitive advantage in Nairobi City County, with a focus on ICT adoption, e-commerce integration, and hybrid work models. The research was guided by several theoretical frameworks: Competitive Advantage Theory, Resource-Based View, Flexible Firm Model, and Technology Acceptance Model. Using a descriptive design, the study targeted 61 managerial staff members at the PCK head office, utilizing a census sampling approach due to the small population size. Data was collected through online and offline questionnaires, validated through pilot testing and reliability checks, including Cronbach's Alpha. Analysis employed both descriptive and inferential statistics, including correlation and regression methods. Findings revealed that strategic positioning significantly contributes to PCK's competitive edge. Specifically, ICT adoption improves operational efficiency, e-commerce expands market access, and hybrid work models enhance productivity and cost control. Despite these benefits, PCK still faces challenges in fully embracing e-commerce. The study concludes that embracing digital transformation is essential for sustainability. It recommends further investment in ICT infrastructure, development of e-commerce capabilities, adoption of digital payment systems, and refinement of hybrid work strategies. These actions are vital for strengthening competitiveness and ensuring long-term organizational relevance in the digital era
Strategic Management Practices and Operational Performance of Selected Supermarkets in Nairobi City County, Kenya
No full textOperational performance of supermarkets globally is marked by a mix of trends and challenges due to a highly competitive and unstable environment. Supermarkets in Kenya have thus experienced a reduction in sales and lowered performance, which has in one way or the other led to the closure of some supermarkets. The business climate of today is defined by a swift succession of market adjustments, a surge in technological advancements, and modifications to the legal working environment. Due to this, they aim to work effectively and efficiently without taking their performance into consideration. The research examined the effects of strategic management procedures on the operational performances of selected Nairobi City County’s supermarkets in Kenya. Specifically, this study aims to investigate the effects of strategy formulation, implementation and evaluation on the operational performances of these supermarkets. Resource-Based View, Activity-Based Costing Systems, Balance Scorecard Theories and the Dynamic Capability Theory served as the theoretical review of the research. The investigation utilised a descriptive research methodology to structure its approach. Primarily, data obtained by employing semi-structured questionnaires. The target population comprised employees of 104 supermarkets presently functioning in Nairobi City County, Kenya. The survey deployed a purposive sampling technique. Data was gathered primarily through semi-structured questionnaires and was distributed to the supervisors, upper management, sales support staff and supermarket personnel of the supermarket. Analysis of the collated information was performed utilising descriptive statistics, which includes frequency, mean and standard deviation and inferential statistics utilising a multiple linear regression model. All ethical morals were duly followed. Findings noted that strategy formulation has a positive yet insignificant effect on the operational performance of these supermarkets; strategy implementation has a statistically positive and significant effect on these supermarkets’ operational performance; and strategy evaluation has an effect that is insignificant effect on the operational performance of these supermarkets. The management should prioritise enhancing the implementation of existing strategies rather than focusing solely on the formulation of new ones. This can be achieved by investing in training programs that equip employees with the skills necessary to effectively execute strategic initiatives. Therefore, supermarket management should consider focusing their efforts on refining their strategy implementation processes and ensuring alignment between strategic goals and operational activities, as these factors are likely more critical in achieving desired performance results in the competitive retail landscape
The Impact of Debt Financing on the Financial Performance of Construction and Allied Firms Listed on the Nairobi Securities Exchange, Kenya
No full textThe construction and allied firms listed on the Nairobi Securities Exchange (NSE) have largely faced challenges in achieving profitability, with many reporting consistent losses over the years. A key factor contributing to these losses is the inefficient use of debt financing, which undermines overall productivity. This study investigates the impact of debt financing on the financial performance of construction and allied firms listed on the NSE. The specific objectives include examining the effects of short-term debt, long-term debt, and total debt on financial performance, as well as exploring the moderating role of firm size in the debt–performance relationship. The study is anchored on five key theories: Pecking Order Theory, Modigliani and Miller Theory, Trade-off Theory, Profit Maximization Theory, and the Growth of the Firm Theory. Guided by a positivist research philosophy, a quantitative approach was employed. A census of four construction and allied firms listed on the NSE over the period 2015–2021 was conducted, using secondary panel data. Data analysis was carried out using STATA software, where panel regression analysis tested the relationships among the variables. The results revealed that both short-term and long-term debt had negative and significant effects on financial performance, while total debt had a negative but insignificant effect. Overall, the findings underscore the risks of excessive debt reliance and highlight the need for construction firms to adopt prudent financing strategies, including reducing dependence on short-term borrowings and exploring internal financing to enhance sustainable performance
Detecting Financial Statement Fraud Using Beneish M-Score and Financial Ratio Analysis: Evidence from Nigeria’s Consumer Goods Sector
No full textThis study examines the determinants of financial statement fraud among listed non-financial firms in Nigeria using the Beneish M-Score model and logistic regression analysis. The research draws on a purposively selected sample of 11 firms from an initial population of 19, covering 110 firm-year observations between 2015 and 2024. Fraud likelihood was modelled as a binary dependent variable derived from Beneish’s framework, while explanatory variables included leverage, profitability, liquidity, capital turnover, and earnings manipulation score (MSCORE). The analysis employed descriptive statistics, correlation matrices, and logistic regression with cluster-robust standard errors to control for firm-level heterogeneity. The findings reveal that leverage and MSCORE significantly and positively influence fraud likelihood, whereas liquidity and capital turnover exert significant negative effects. Profitability shows a marginally significant inverse association, implying that better-performing firms are less prone to engage in manipulation. The model demonstrated high predictive accuracy with an area under the ROC curve of 0.97, indicating strong discriminatory power. The study underscores the need for robust internal controls, stronger audit oversight, and enhanced regulatory surveillance to deter manipulation and promote reporting integrity in Nigeria’s capital market
Budget Deficit, Budget Reform Index and Macroeconomic Performance in Nigeria
Get PDFThis study examines the relationship between budget deficit, budget reform index and macroeconomic performance in Nigeria between 1981 and 2023. The study adopts the Budget Reform Index (BRI) measure as a proxy for budget reform as against previous work that adopts dummy variable as a measure for BRI. The budget reform index is a more rigorous, comprehensive and quantitative measure; giving credence to this work and value addition. Therefore, the novelty of this work is the introduction of Budget Reform Index which previous studies ignored. The study employed the Auto regressive distributed lag model (ARDL) method to analyze the time series data. The reason for adopting the ARDL is to test for both short run and long run parameters of the models. Findings from the ARDL analysis showed that the impacts of budget deficit on output and employment are positive and significant in the short run and long run periods. In the short run budget deficit increases outputs and employments by 0.003 and 0.0001 per cents respectively while in the long run it raises outputs and employment by 0.096 and 0.008 per cents respectively. Similarly, in the short run, budget reform index increases outputs and employments by 0.032 and 0.004 per cents respectively whereas in the long run it increases outputs and employment by 1.096 and 0.097 per cent respectively.
Further findings indicated positive and insignificant impacts of budget deficit on current account balance (balance of payments) in both short run and long run. The short run and long run effects of budget reform index is also consistently positive and statistically insignificant. While budget deficit raises the balance of payment position by about 0.62 per cent in the short run, it increases it by about 1.1 per cent in the long run. On the other hand, the fiscal reform index raises the balance of payment position by about 3.55 per cent in the short run and increases it by about 6.19 per cent in the long run but the effect was insignificant in both the short and long run periods. The study recommends that budget reform policies should contain quantifiable expectations/benchmarks to facilitate proper monitoring and evaluation of budget performance. Furthermore, the study calls for fiscal policy and budget administration that encourages improvement in the country’s balance of payments position, etc
An Application of Stochastic Systems on Asset Price Changes for Capital Markets
Get PDFApplications of Constant Elasticity of Variance (CEV) Equations were considered in assessing the wealth of two different corporate investors and describing the behavior of a security’s volatility over time. The methods of Ito’s were explored and a précised condition of obtaining wealth of each corporate investor is given to illustrate the effectiveness of the systems. Each investment solutions suggest distinctive perceptions on CEV dynamics of assessing wealth of corporate investors. From the stochastic approximation of graphical solutions portrays as follows: the relationship between the wealth and the returns is not perfectly linear; the wealth of investor is directly proportional to the returns of the investment; the wealth is growing at an increasing rate over time; the wealth of the investment is decreasing at steady rate over time. Finally, probability parameter quantified the likelihood of different outcomes such as positive or negative returns on investments. The simulation results presented graphically with the use of MATLAB and discussions of these graphical solutions with relevant parameters were addressed effectively all in this paper
European Put Option Valuation with Statistical Tests for Capital Market Investments
Get PDFThe analysis of European put option implies contracts which permit investors to sell particular number of securities within specified time frame at a predetermined price. In particular, the Black-Scholes put option were investigated on the share prices of Fidelity, Access and Merged Banks which paved way to obtain put option close form prices. The table results were presented on disparities of put option prices at specified time frame and the effect of the relevant parameters were discussed. Also, the share prices were subjected to statistical test using Bartlett’s test, Fisher’s F-max test and Cocharan’s C-test. The results show that the variances of the shares prices are different from Bartlett and Fisher tests while Cocharan’s C-test was on the contrary which informs investors to make some vital decisions. The results presented here will also be beneficial to banks managements for decision making depending on their share price changes