The study examines the impact of domestic macroeconomic variables on the Nigeria’s stock market returns, using Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model and annual data (1985-2009). We investigate the ability of these variables to predict the level of the stock market returns, using GARCH-M model. The results reveal that, out of the six macroeconomic variables employed, inflation, government expenditure, index of manufacturing output and, interest rate, exert strong significant influence on stock returns. Inflation and government expenditure have a positive significant impact, while index of manufacturing output and, interest rate have a negative significant impact. On the other hand, money supply and foreign exchange rate exert no significant influence on stock returns in Nigeria. The study observed that, there is volatility clustering in Nigerian stock market. Volatility of Nigeria’s stock market returns was influenced by past volatility more than the economic news from the previous period. The time-varying volatility of the Nigeria’s stock market returns is moderately persistent. In other words, a shock to the Nigeria’s stock market volatility will last moderately long. Financial regulators, policy makers and investors need to take these macroeconomic variables into account when formulating economic and financial policies and, structuring of portfolio and diversification
The study examined the dynamic responses of profitability indexes to capital adequacy ratios of authorized internationalized deposit money banks in Nigeria. The data were sourced from the financial year books of the deposit money banks and analyzed with static and dynamic panel estimators. The static estimator shows that the banks have differences in managerial style, size and profitability. Also, it was revealed that return on asset and return on equity responded positively to asset size, efficiency of the use of asset and current ratio in the static models and they were highly significant. However, they were insignificant in the dynamic specifications except asset size that was significant in the return on asset model showing a weak dynamic response of profitability to capital adequacy ratios. Hence the study recommended that Banks should improve their share based as to increase the asset as this will improve profitability.
This study investigated the role of financial structure in explaining economic growth dynamics in Nigeria using annual time series from 1981-2017. The study employed the vector error correction model (VECM) in the analysis of the data. As lead up to financial structure and economic growth relationship analysis, the competing theoretical views of bank and market based financial system and economic growth were explored. The result of the study showed that economic growth, financial development variables and the underlying control variables are cointegrated. The result of the economic growth effect of financial development showed that stock market and bank-based have a significant effect on growth. This implies that both bank-based and market-based matter in explaining economic growth dynamics. On the relationship between financial structure and economic growth, the study revealed that economic growth, financial structure and the underlying control variables have a long run relationship. The study also revealed that financial structure which captures the combination of stock market-based and bank-based has a positive significant effect on growth. A significant coefficient of financial structure implies that financial structure matters in explaining growth. Therefore, the study posits that the overall financial structure is the most useful way to assess the financial systems since both bank and stock market system matter in explaining economic growth as against bank-based versus market-based debate. Based on the empirical evidence, the study therefore recommends that there should be continuous holistic reforms of both banking and stock market simultaneously, as the development in one sector has a neglect effect on the other.
This research analyzed the insurance industry and economic growth in Nigeria between 1980 and 2015. Secondary data ranging from real gross domestic product, the premium of the insurance business, claim expenditure of insurance industry and inflation rate were utilized and sourced from Central Bank of Nigeria (CBN). The Ordinary Least Squares (OLS) multiple regression techniques, Descriptive statistics, Augmented Dickey-Fuller (ADF) test of stationarity and ARDL Bound Test Co-Integration were adopted for the model in the Study. The findings revealed that the premium of the insurance industry (PMI) impacts negatively on economic growth both in the extended and short run period. The claim expenditure of the insurance industry (CEX) revealed a progressive relationship with economic growth in the long run and a negative relation with growth in the short run. We therefore conclude following the Keynesian theory of aggregate demand which states that, ‘’if we will have to wait till the long run, we will all be dead’’, that insurance industry in Nigeria has not impacted positively on economic growth of Nigeria within the period under review and its operations and investment have not been prominent and contributory to the growth and development of Nigeria. Based on these outcomes, we recommend amongst others, that more investment ought to be made towards the insurance industry in Nigeria especially in terms of proper policy formulation by the government that would channel funds and encourage competition among the players in the industry and invariably contribute to the growth of the economy.
This paper examined the effect of power supply and the performances of Small and Medium Scale Enterprises (SMEs). In doing this, the paper used durations of public power supply, bills paid for public power and cost paid for private power supply as measures of power supply on the performances index of the SMEs in Port Harcourt. The performance indexes are employed in the models as the dependent variables while the power supply indexes are the explanatory variables. The data were sourced primarily through a well-structured questionnaire and the samples determined by the Cochran sampling techniques. The data were analyzed with the Qualitative Respond Model. It was revealed that a lower duration of public power supply significantly reduces the profitability, productivity and revenue, as well as the storage of products of the SMSEs, examined. Hence, the study recommended among others that there is a need to allocate more electric power to the industrial area of Rivers state- Port Harcourt, especially in the day light to encourage productivity, profitability and employment generation in the state.
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