81 research outputs found
IS THERE EARNINGS DISCONTINUITY AFTER THE IMPLEMENTATION OF IFRS IN NIGERIA?
No full textEarnings metrics are major financial indicators which capital market participants and investors focus on for informed decisions. Because reporting earnings increase may enhance firms’ stock price, many managers are motivated to avoid reporting earnings decreases, but prefer to consistently report increase earnings greater than its previous valuation. There is evidence that such practice has led to a situation of conspicuous upward shift in frequency of observations, starting from the left of identified earnings benchmark to the right. Recent studies have shown that a change in accounting regulation may have effects on the shape of the firm-year distribution of earnings. This paper examines the discontinuity evidence for Nigeria, in relation to the adoption of the international financial reporting standard. The aim is to establish whether discontinuity in earnings, represented by the asset-scaled net profits, as well the discontinuity in earnings-change, has reduced following the adoption. According to literature, the study employs three methods – empirical histogram, standardise differences tests and the permutation tests – to validate the aims. The findings suppose evidence for increase in discontinuity, indicating increased in small profits’ earnings management, after the adoption. Contrary, the evidence is not sufficient to conclude that the discontinuity has increase for the earnings-change. It can be argued that the adoption has not achieve much in ensuring firms are monitored against earnings management to avoid losses. The study has limitation, since it considers only the distributions of earnings and earnings-changes. The distribution of forecast errors is not investigated because such is influence by forecast management. Future studies may consider this for improvement
Exchange Rate Volatility and Nigerian Stock Market Development
No full textPurpose: The study aims to evaluate the impact of exchange rate volatility on the indicators of stock market, such as the returns, capitalization, liquidity, transaction volume, based on the Nigerian evidence.
Theoretical framework: The paper considers extant model of exchange rate-stock market interactions. Because the diversity of the market is important the paper follows suggestions by El-Wassal (2013) to examine variety of stock market indicators in order to offer accurate depiction of how the stock market drives exchange rate volatility.
Design/Methodology/Approach: The study employs a simple static regression model of stock market indicators with autoregressive adjustment component which absorb autocorrelation. The models are tested on annual data (1985-2020).
Findings: The study finds that the exchange rate volatility has negative impact on stock market development - returns, capitalization and volume. The paper reveals further that other correlated controls factors impinge different impacts on the stock market indicators.
Research, Practical & Social implications: One implication of the finding is that the volatility may discourage investors, reduce firm performance, and lead to reduction on the returns of firm shares. Policy makers should put in place growth-inducing infrastructural investments to make the business environment more conducive to attract foreign capital, while also positioning the capital market with several initiatives to increase trading activities.
Originality/Value: The connection between the foreign exchange and financial markets is of policy importance. Although the focus is on the Nigerian markets, the evidence could be extended to other African and global markets, to serve as guide to foreign investors
Moderating Role of Financial Literacy on the Relationship between Financial Technology and SMEs’ Growth in Nigeria
No full textPurpose: This study examines the effects of FinTech adoption and financial literacy on the growth of Small and Medium Enterprises (SMEs) in Zamfara State, Nigeria. It specifically evaluates the influence of mobile money services, agency banking and POS services, and digital microfinance/P2P lending on SME growth, as well as the moderating role of financial literacy in the relationship between FinTech adoption and SME performance.
Design/Methodology/Approach: A quantitative research design was employed using primary data collected through a structured questionnaire administered to owners and managers of registered SMEs across various sectors in Zamfara State. A sample of 400 respondents was selected through stratified random sampling. The survey instrument captured data on FinTech usage, financial literacy, and SME performance. Descriptive statistics, Pearson correlation, and multiple regression analyses were used to assess the relationships among the variables.
Findings: The results indicate that FinTech solutions, including mobile money, agency banking/POS services, and digital microfinance/P2P lending, significantly enhance SME growth in Zamfara State. Financial literacy also demonstrates a strong positive effect on SME performance and serves as an important moderator, strengthening the impact of FinTech adoption on SME growth outcomes.
Implications/Originality/Value: The study highlights the critical role of digital financial services and financial literacy in driving SME growth in an underserved region. It provides empirical evidence relevant to policymakers and financial institutions, recommending the expansion of digital financial access and the integration of financial literacy programmes to promote sustainable SME development in Zamfara State
DETERMINANTS OF CORPORATE LEVERAGE IN EMERGING ECONOMIES: THE ROLE OF FIRM CHARACTERISTICS, MACROECONOMIC CONDITIONS, AND INSTITUTIONAL QUALITY
No full textThis study investigates the determinants of corporate leverage among firms in emerging economies, motivated by the need to understand how firm-specific characteristics and macro-institutional factors shape financing decisions.Usinga comprehensivepaneldataset offirmsacrossvariousindustries,theanalysisemploysordinary least squares (OLS), quantile regression, and sensitivity tests with interaction terms to capture heterogeneity in leverage behaviour. The empirical findings indicate that profitability, tangibility, inflation, and institutional quality are positively associated with leverage, while firm size, GDP growth, and interest rates exhibit negative relationships. Notably, the quantile regression results reveal that the strength of these associations varies across the leverage distribution, with profitability and institutional quality exerting stronger effects at lower quantiles. These insights underscore the importance of designing policies that enhance institutional frameworks, stabilise macroeconomic conditions, and promote access to diverse financing options. It is recommended that policymakers strengthen creditor rights, support alternative finance mechanisms, and implement macro- prudential measures to ensure sustainable corporate borrowing practices in emerging markets
REGULATORY STRINGENCY, CORPORATE GOVERNANCE AND FIRM PROFITABILITY: STATIC PANEL ANALYSIS OF INSURANCE COMPANIESIN NIGERIA USING RANDOM EFFECTS APPROACH
No full textThis study investigates the influence of corporate board characteristics on the profitability of listed insurance firms inNigeria, witha particular focus on the moderatingeffect ofregulatorystringency. Usingbalanced panel data covering10 firms from2014 to2023, the researchapplies a randomeffectsregression model to explore the relationshipsamong board size, board composition, gender diversity, meeting frequency, and financial expertise in relation to return on assets (ROA). The analysis also incorporates firm-specific controls and regulatory stringency indices to examine conditional effects. Descriptive statistics reveal moderate variability across governance attributes, while correlationand multicollinearitydiagnostics confirmstatistical validity. The results indicate that board gender diversity and financial expertise significantly influence firm profitability, with regulatory stringency negatively moderating the relationship. Findings align with agency and resource dependence theories,emphasizingthedualroleofgovernance qualityand externalinstitutionalconstraints.This research contributes to the evolving discourse on corporate governance in emerging markets by offering evidence-based insights into board dynamics under varying regulatory intensities. The study recommends targeted reforms to improve board capacity while recognizing the need for adaptive regulatory frameworks that support firm performance
Digital Transformation for Educational Development in Sub-Saharan Africa
No full textDigital transformation holds significant promise for revolutionizing education in Sub-Saharan Africa (SSA). This paper examines the challenges of digital transformation in education in the SSA region. We observed that the challenges are multifaced, including infrastructure deficits, access and equity barriers, digital literacy gaps, financial constraints, policy challenges, and regulatory barriers. To overcome these challenges, the paper offers some recommendations that can help the SSA countries to unlock the transformative power of digital technologies to advance education, empower learners, and build a brighter future. Amongst other, the paper suggests that stakeholders must adopt an integrated approach to infrastructure development, promote equitable access and inclusion, invest in capacity building and skills development, localize educational content, mobilize financial resources, enact policy and regulatory reforms, and foster collaborative partnerships
The Casualty Evidence for Interest Rates and SME’s Outputs Relation from A Developing Economy
No full textPurpose
Small and medium-scale enterprises (SMEs) play a significant role in many economies. Governments often employ various policies, especially monetary policy, to support their operations. This study aims to illustrate the interdependence between SMEs' output growth and monetary policy instruments, specifically the interest rate.
Methodology
The study utilized data spanning 1980 to 2021 to investigate evidence of symmetric Granger causality and asymmetric causality between interest rates and SMEs' outputs in Nigeria.
Findings
The symmetric approach reveals unidirectional causality evidence from the interest rate to SME output, without potential feedback effects. The asymmetric causality demonstrates that both positive and negative shocks in interest rates drive shocks in SMEs' outputs, but not vice versa.
Conclusion
The study concludes, among other findings, that to enhance the impact of policies on SMEs' outputs, authorities should establish state agencies as coordinating units to monitor policy implementation. Additionally, efforts should be directed towards putting adequate infrastructural facilities in place for the proper operation of the SMEs.
Practical Implications
The study provides insights indicating that positive (negative) shocks in the interest rate cause negative (positive) shocks in SMEs output, thus aligning with the associated economic theory
Effect of Institutional Quality on Financial Inclusion of SMEs in MENA Countries
No full textPurpose: This study investigates whether institutional quality influences monetary partaking (financial inclusion) among SMEs in Middle East and North African (MENA) countries. It analyses how political stability, government effectiveness, and regulatory quality shape SME access to financial services across a 29-year period (1996–2023).
Design/Methodology/Approach: The study adopts an ex-post facto research design using secondary data from the Worldwide Governance Indicators (WGI) and Global Findex database. Financial inclusion indicators include SME access to credit, savings, and digital payments. Institutional quality is measured through political stability, regulatory quality, and government effectiveness. Robust regression analysis was applied to address non-normal data distribution, confirmed by a Shapiro–Wilk test (W = 0.977, p < 0.05), while a Breusch-Pagan test (χ² = 0.01, p = 0.9097) verified homoscedasticity.
Findings: Political stability (β = 0.288, p < 0.001) and regulatory quality (β = 0.584, p < 0.001) significantly enhance SME financial inclusion, while government effectiveness has no significant effect (β = 0.001, p = 0.985). The model accounts for 86.74% of the variation in financial inclusion (R² = 0.8674), highlighting institutional factors as key determinants.
Implications/Originality/Value: The study underscores the importance of improving political stability and regulatory frameworks to expand SME financial inclusion in MENA countries. It contributes original long-term empirical evidence and provides practical insights for policymakers aiming to strengthen institutional environments and reduce financial barriers for SMEs
Leveraging Machine Learning for Exchange Rate Prediction: A Business and Financial Management Perspective in Nigeria
No full textPurpose
The continuous availability of historical data for asset prices propelled more attention of researchers to use analytical algorithms to study the evolution of prices. This paper aims to use four machine learning algorithms to forecast the exchange rates in Nigeria.
Methodology
The paper employs Logistic Linear Regression, Support Vector Machine, Random Forest, and XGBoost algorithms to predict the univariate time series of Nigeria\u27s exchange rate against the US dollar, using both hourly and daily data.
Findings
The findings indicate that the Random Forest (RF) model outperforms other approaches in predicting Nigeria’s exchange rate against the US dollar, demonstrating the lowest prediction errors (MAE, MSE, RMSE, and MAPE). RF remains the most accurate model across both hourly and daily frequencies, with XGBoost emerging as the second-best performer.
Conclusions
This study applies machine learning models to enhance exchange rate prediction, demonstrating that the exchange rate series is not sensitive to data periodicity. The findings provide valuable insights for stakeholders in the foreign exchange market, aiding policymakers in selecting the most accurate forecasting techniques
INTERVENTION ANNOUNCEMENTS AND NAIRA MANAGEMENT: EVIDENCE FROM THE NIGERIAN FOREIGN EXCHANGE MARKET
No full textMany studies establish how foreign exchange intervention affects the exchange rates. Intervention announcement do also have impact different for the actual financial involvement. Recent evidence has tested this for some countries but none has investigated Nigeria, despite volume of interventions and its announcements made via press circulars by the central bank. The paper applies daily data, from January 02, 2001 to May 15, 2023, to verify the impact of intervention announcements on the Nigerian exchange rate. The paper evaluates the relationship based on an event driven baseline specification, which measure the impact of announcement period windows on the exchange rate. The paper finds conclusive evidence of highly significant impacts that past, contemporaneous and future intervention announcements cause appreciation shocks. The naira is revealed to appreciate by 3.5% upon the intervention announcement, and this further increases to 4.49%, 4.55% and 5.22%, on one day, two day, three days after, but subsequently slow down on fourth day (5.21%) and fifth day (3.45%) after the intervention announcements. Robustness test based using alternative data frequency for the estimation yields close (different) result for the monthly (quarterly) periodicity, therefore supposes that the data frequency matters. The result has implications for future conduct of interventions and conventional monetary policies. Amongst others, higher market uncertainty, low credibility of transmission mechanism and possible predominance of global over the national factors may contribute to influences the effectiveness of interventions. The paper’s major limitation is that it excludes the influence of actual intervention, via sales and purchases of dollar, by the central bank
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