3 research outputs found
Energy-related uncertainty, financial regulations, and environmental sustainability in the United States
No full textThe US has been classified as being “insufficient” by the Climate Action Tracker, indicating that the current actions and policies fall short of addressing critical environmental challenges. This suggests the need for enhancing the existing policy measures for improving environmental sustainability. To this end, this study investigates the time-varying impact of energy-related uncertainty and financial regulations on sectoral CO2 emissions in the US. The bootstrap rolling-window Granger causality approach is employed to examine quarterly data spanning 1990Q1–2021Q4. The estimation results reveal that energy-related uncertainty increases CO2 emissions in the transportation, residential, manufacturing, and construction sectors. On the other hand, financial regulations are found to reduce CO2 emissions across the agricultural, transportation, residential, manufacturing, and construction sectors. The findings suggest the need for enhanced policy measures to improve energy stability and strengthen financial regulations focusing on climate-related disclosures and facilitating investments in low-carbon initiatives
MACROECONOMIC DETERMINANTS OF MICROFINANCE BANKS’ CAPITAL STRUCTURE IN NIGERIA
No full textThe financial stability of Microfinance Banks (MFBs) in Nigeria is pivotal to advancing financial inclusion and stimulating economic development, particularly among underserved populations. However, these institutions operate in a dynamic and often unstable macroeconomic environment, which significantly influences their capital structure decisions. This study investigates the macroeconomic determinants of capital structure among Nigerian MFBs, focusing specifically on inflation, exchange rates, gross domestic product (GDP), and lending rates. Adopting an ex-post facto research design, the study utilizes aggregated secondary data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin, covering the period from 1992 to 2022. The analysis employs the Auto Regressive Distributed Lag (ARDL) regression technique to examine both short-run and long-run dynamics. The findings show that the inflation rate has a positive association with MFBs\u27 capital structure (coefficient = 0.018, p = 0.016) in the short run and (coefficient = 0.008, p = 0.033) in the long run. Similarly, GDP negatively impacts capital structure of MFBs with (coefficient = -0.024, p = 0.035) in the long run. Other variables, such as exchange rates and lending rates, were not statistical significant. The study concludes that macroeconomic conditions substantially shape the capital structure decisions of MFBs in Nigeria. It recommends among others that MFBs should adopt strategic measures to manage macroeconomic fluctuations, such as implementing inflation-hedging strategies by increasing reliance on equity financing during periods of high inflation
CREDIT RISK MANAGEMENT AND PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA
No full textBanks in all climes are primarily faced with problem of credit risk whenever they mediate between the surplus and the deficit units of the economy. This study examined the impact of credit risk management on the profitability of deposit money banks in Nigeria. Specifically, this study evaluated the impact of credit risk management on return on assets, return on equity, and net operating income of deposit money banks in Nigeria. This study adopted an ex post facto research design. Nineteen listed deposit money banks as at December 31, 2018 form the population of this study out of which a sample of fifteen banks were selected based on complete availability of data from 2007-2018. Data obtained was subjected to fixed and random effects regression estimations for the various models in this study using the Hausman test. Findings revealed that: (i) loan-value ratio and loan-deposit ratio significantly impacted on return on assets of deposit money banks, while non-performing loan ratio, bank size, and log of total loans did not significantly impact on return on assets of deposit money banks in Nigeria; (ii) total loans significantly affected return on equity of deposit money banks, while loan-value ratio, loan-deposit ratio, bank size, and non-performing loans did not significantly affect return on equity of deposit money banks in Nigeria; and (iii) bank size, non-performing loan, and total loans were found to significantly affect net operating income of deposit money banks in Nigeria, while loan-value ratio, and loan-deposit ratio did not significantly exert on net operating income of deposit money banks in Nigeria. The study therefore, concluded that loan-value ratio, loan-deposit ratio, value of total loans, bank size, and non-performing loans influence banks profitability in Nigeria, and recommended that proper attention be paid to these variables in order to increase the profitability of deposit money banks in Nigeria
