The purpose of this paper is to examine the influence of firm characteristics and some key monetary variables on the financial performance of Unilever Nigeria Plc. The variables used are financial performance, capital structure, dividend policy, managerial efficiency, inflation rate, interest rate and exchange rate. The autoregressive distributive lag (ARDL) model was used for the study. The findings show that capital structure and managerial efficiency have a significant positive effect on the financial performance of the sampled company; however, dividend policy has no significant influence on the financial performance of the company. Similarly, from the key monetary variables aspect, the study discovered that inflation rate and exchange rate have a significant positive influence on the financial performance of the company, while interest rate has a significant negative effect on the company’s financial performance. Based on these, this study suggests the need for the company to increase its effort to improve its capital structure and managerial efficiency. In addition, the study suggests the need for the company to consider the volatility of inflation and exchange rate when making investment decisions. Finally, the lending rate should be reduced by the deposit money banks for the company to gain easy access to capital to increase its investments and financial performance.
This study moderates firm characteristics with key monetary variables (inflation rate and exchange rate) and examine their effect on the financial performance of fifteen (15) listed consumer goods manufacturing firms in Nigeria using an annual panel dataset from 2004 to 2020. The dependent variable (financial performance) is measured as return on assets while the independent variables are capital structure, dividend policy, managerial efficiency and firm size. In addition, the study used fixed and random effects regressions as techniques of data analysis. The results of this study are categorized into two parts namely; regression results without moderators and regression results with moderators (inflation and exchange rate). The result from the model without moderators shows that there is a positive and statistically relationship between capital structure, managerial efficiency and firm size and financial performance while dividend policy has no significant effect on financial performance. However, the results moderated with both the inflation and exchange rate indicate that capital structure and firm size have a significant negative effect on financial performance while dividend policy and managerial efficiency have a significant positive effect on financial performance. Thus, this study recommends the need for an increase in both dividend policy and managerial efficiency and limiting the increase in capital structure and firm size since they adversely affect financial performance. Finally, there is a need for consumer goods manufacturing firms to put into consideration the trends in monetary variables before making any investment decision.
This study examines the reaction of banking sector health to the shocks of monetary policy in Nigeria using a monthly time series dataset from January 2010 to December 2021. In the estimate instruments of monetary policy such as monetary policy rate, open buyback, treasury bills, liquidity ratio and cash reserve ratio were used while banking sector health was measured as loan-to-asset-ratio and loan-to-deposit ratio. In addition, the impulse response function was used as the technique of analysis. The results of this study reveal that monetary policy rate and cash reserve ratio impulse adverse shocks to banking sector health measured as a loan-to-asset ratio, while open buyback, treasury bills, and liquidity ratios have caused a positive shock to banking sector health. Differently, from the loan-to-deposit ratio, this study shows that shocks to the monetary policy rate, open buyback, and cash reserve ratio have transmitted negative shocks to the health of the banking sector. In addition, shocks from treasury bills and liquidity ratios have led to a positive reaction from the side of banking sector health. To make the banking sector so strong, the central bank should reduce the monetary policy rate and cash reserve ratio, and increase treasury bills and liquidity ratio.
This study examines the impact of money market variables on stock market volatility in Nigeria using an annual dataset from 1985 to 2021. Indicators of the money market, including certificates of deposit, commercial papers, bankers' acceptance, and treasury bills, were employed in the study. The Generalized Autoregressive Conditional Heteroskedasticity (GARCH-in mean) model was used to generate volatility of stock market index and a nexus between the variables. The findings showed that while commercial paper and treasury bills have no effect on stock market volatility in Nigeria, certificates of deposit and bankers' acceptance do. This study suggests increasing investment in money market indicators, particularly a certificate of deposit and bankers' acceptance, to lower investment risk and volatility of the stock market index.
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