This paper examines the relationship between Government fiscal policy measures and stock prices in Nigeria during the period 1985 -2012. Employing OLS, co-integration, error correction mechanism (ECM), Granger Causality and impulse response and variance decomposition techniques on fiscal policy -stock prices model patterned after a multivariate regression, the study found a significant and negative impact of Public expenditure on stock prices, while Government Domestic Debt Outstanding exerts a significant and positive influence on stock prices. The study also reports a significant and positive relationship between Non-Oil Revenue and stock prices while the two-period and three-period lagged values of broad money supply have significant relationship with stock prices. The Granger causality tests reveal that Stock prices lead changes in Public Expenditure, Domestic Debt and Money Supply respectively while Non-Oil Revenue leads changes in stock prices. The results of both the IRF and VDC analysis reveal that own shocks represent the dominant source of variation in the forecast errors of the variables. The paper therefore recommends that appropriate fiscal policies should be designed and implemented on account of the significant and profound impact of fiscal policies on stock market prices.
This paper is an attempt aimed at investigating the empirical relationship between measures of monetary policy and the bank asset (BKA) channel of the monetary transmission mechanism as well as the direction of causality between them. The impulse response function of the monetary variables to shocks in the monetary system were also examined. Using data for the period 1970-2010 and employing co-integration, error correction mechanism and variance decomposition techniques, the study found a positive and significant long run relationship between BKA, money supply (MNS), cash reserve ratio (CRR) and Minimum Rediscount Rate (MRR) as well as a uni-directional Granger causality from BKA and CRR to MNS respectively. The results of the variance decomposition of BKA to shocks emanating from CRR, MRR and MNS show that own shocks remain the dominant source of total variations in the forecast error of the variables. The authors recommend that monetary policies should be properly fashioned to accomplish their target objectives in the economy.
This paper is an empirical investigation into the relationship between fund mobilization by insurance companies and gross fixed capital formation (GFCF) in Nigeria and specifically how the latter responds to stimuli emanating from the insurance companies. A five variable-predictor multivariate regression model was estimated and analyzed. The short run results reveal that four explanatory variables namely: premium from fire, accidents, motor vehicles and employee liabilities insurance policies positively and insignificantly correlate with Gross Fixed Capital Formation while the relationship between premium from marine insurance policies and GFCF is both negative and insignificant. In the long run, the fund mobilization variables by insurance companies positively and significantly impact on the growth of gross fixed capital formation. In addition, the Granger causality test provides no evidence of causality among the variables. The paper therefore recommends the formulation and implementation of policy measures that will increase insurance penetration, improve insurance fund mobilization and enlarge the insurance market in Nigeria.
This paper examines the management of the financial statement of UBA using goal programming (GP) technique. The data are collected from the annual financial statement of the bank to cover a period of 2007 to 2011. Six goals are identified in the bank: goal (1) (asset accumulation); goal 2 (liability reduction); goal 3 (shareholders’ wealth); goal 4 (earning); goal 5 (profitability); and goal 6 (optimum management of the items in the financial statement). Applying POM-QM Version 3 software, the solution generated reveals that besides goal 2, all other goals are attainable by the bank. It is not therefore possible for the bank to reduce its liabilities, for the sake of reducing or increasing the other items of its financial statement. Based on this, it is concluded that the bank should convert its liabilities to earning assets quickly or as much as possible
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