POST-BANK CONSOLIDATION: A debacle in the survival of SMEs in Nigeria “An Empirical Study”
►Omah Ishmael, Durowoju Stella .T, Adeoye Abayomi O and Elegunde Ayobami Folarin
The contention of this paper is to examine the impact of post-bank consolidation on the performance of Small and Medium Scale enterprises (SMEs) in Nigeria, with special reference to Lagos State. To examine the meritorious advantages of bank consolidation (mergers and acquisitions) in the shareholders wealth creation. To assess the trends, if any, of post-bank consolidation on the economic development of Nigeria and to highlight the ancillary benefits that may have accrued to the economy and SMEs as a result of post bank consolidation. The data procurement was based on survey of Neolithic literatures as well as primary sources, through dissemination of questionnaires based on the concept of the subject matter. A sample size of 50 was drawn from the supra-population of the study within Ikeja Local Government Area in Lagos State, using random sampling techniques. The mean, standard deviation and coefficient of variation were also applied in analysis of data collected. On-line discussions with the respondents was equally adopted which aimed at enlarging the scope of coverage in data collection. The analysis of the study reveals that SMEs in Nigeria, with reference to Lagos State metropolis, do not have better access to finance through banks, due to neo-reorganization in banks as a result of post bank consolidation. It was revealed that SMEs do not have absolute rapport with the financial institutions due to their financial background in Nigeria. They are financially handicapped which limits their size and the capacity to embark on bank loans with high interest rate. The researchers, therefore, are of the opinion that the government should enable the SMEs by providing enabling ground to a better access with financial institutions as regards bank loan at an affordable securities. The paper highlights the supra-environment in which the SMEs operate in Nigeria and their attendant limitations which are assumed do not harness the future survival of the SMEs in the long run.
Keywords: Consolidation, performance, SMEs neo-reorganization survival, rapport background, Neolithic-literatures.
HOW DOMESTIC DEBT HURTS BANK PERFORMANCE: A Micro Analysis
►Obademi Olalekan Emmanuel
This study focuses on the interplay of domestic debt and bank performance and thus an attempt has been made to investigate the long-run relationship and direction of causality of the impact of domestic debt on bank performance using different variables herein the earnings per share, return on equity and return on capital employed. The banks used are the First Bank of Nigeria Plc, United Bank for Africa Plc being the two banks with huge penetration in the Nigerian banking industry. A general model for the micro analysis was developed with ample support of a macro model with the background of a simultaneous equation and further use of vector auto-regression estimation procedure. The result of the analysis shows that domestic debt impairs bank performance but the direction of impact on the two banks varies. While domestic debt impacts most negatively on the return on equity of First Bank Plc followed by its earnings per share, for United Bank for Africa domestic debt impacts most negatively on return on capital employed followed by its return on equity. It is believed that though domestic debt can be used as an instrument of economic stabilization, nonetheless, care must be taken to avoid a situation whereby it makes the business environment unfriendly.
Keywords: Domestic Debt, Bank Performance, Return on Capital Employed, Earnings Per Share, ROE
ORGANIZATIONAL CHARACTERISTICS IN INFLUENCING GREEN HOMES DEVELOPMENT
►Fazdliel Aswad Ibrahim, Mohd Wira Mohd Shafiei, Radzi Ismail and Ilias Said
The advances of green technology had contributed to the preparedness of all the stakeholders in the housing industry into perspective. The housing developers in particular, were urged to develop new housing scheme by adopting green technology into their developments. Therefore, these organizations were required to implement changes to their operations due to sophisticated of technology made in this industry. Drawing on theory of organizational change, the organizational characteristics were acknowledged have significant roles in influencing the organization to embrace new ideas, approaches and practices. Hence, this paper is aimed to examine the relationship between the organizational factors in influencing housing developers to develop green homes in Malaysia. Quantitative method has been used in this study. A total of 395 sets of questionnaires have been distributed to the housing developers in eight distinct state branches of Real Estate and Housing Developers Association (REHDA) Malaysia. This study successfully received 249 (63.03%) completed questionnaires. The result of Pearson Correlation revealed that the Organizational Culture, Organizational Climate and Organizational Structure have a positive relationship in persuading Malaysian housing developers to develop green homes development.
Keywords: Organizational Change, Organizational Climate, Organizational Culture, Organizational Structure
HOW INTELLECTUAL CAPITAL AFFECTS A FIRM’S PERFORMANCE?
►Chokri ZEHRI, Asma ABDELBAKI and Najla BOUABDELLAH
The impact of intellectual capital on firm performance is still poorly defined. In this paper, we try to find the relationship between intellectual capital and business performance from the standpoint of financial performance, the marketplace and economics. We conduct a study of the literature on this subject and we announce our research hypotheses. Our empirical study use a sample of 25 companies listed on the stock market in Tunisia. By using a panel’s data we perform the necessary tests for obtaining robust results. The main objective of this study is to determine an exact impact of intellectual capital on the performance of these companies.
Keywords: intellectual capital, performance, panels, Tunisia, relationship.
AUDIT COMMITTEE AND INTEGRITY OF FINANCIAL STATEMENTS: A Preventive Mechanism for Corporate Failure.
►Kenneth Enoch Okpala
Corporate governance is a phenomenon that has recently attracted local and foreign interest due to the frequent occurrences of corporate failures experienced by various organizations in both developed and developing nations around the world. Financial statements are the midpoint of this corporate disorder and auditing profession is said to responsible for the disaster. This has brought the question of how efficient is our financial system and the effectiveness of the audit infrastructure. This study investigated the effect of audit committee oversight function on integrity of financial statements as a means preventing organizational failure. The population of this study consisted of 183 public quoted companies in the Nigerian Stock Exchange, 100 medium and large audit firms and 616 investor with about 10% holding in PLC. Data was elicited using structured questionnaires. Hypotheses were confirmed using Z-test. The result shows that there is significant relationship between audit committee activities and integrity of financial statements, which enhances the quality corporate governance and prevents organizational failure. The study recommended that a committed audit committee should be established and members to be appointed should possess analytical skill with strong financial background. The will go a long way to curb the incessant corporate failure in Nigeria.
Keywords: Corporate governance, Agency theory, Audit committee, Financial statements, Corporate failure
An Exploratory Study of Perceived Economic Viability of Islamic Banking in Gombe Local Government Area, Gombe State, Nigeria
►Fada, Kodun Abiah
The paper set out to ascertain the viewpoints of the people of Gombe L.G.A. to review their perceptions of the economic viability of Islamic banking. The paper presents primary data collected through the use of questionnaire involving a sample of 134 respondents. The survey employs an exploratory factor analysis to examine what the respondents perceive to be the economic viability of Islamic banking in the local government area. The survey confirms that the advent of Islamic banking in the area will bring about economic benefits as it will serve as a means for financial inclusion for the financially excluded and will also serve as a potential vehicle for fund mobilization, create more employment opportunities and encourage foreign investment especially from the Middle East amongst others. However, the paper suggests that in order to actualize these economic benefits, the central bank and other relevant stakeholders including licensed Islamic banks must do enough in the area of creating awareness of Islamic banking and its relevance to the people.
Keywords: Perception, Islamic Banking, Economic Viability
ON AUTOREGRESSIVE DISTRIBUTED LAG, COINTEGRATION AND ERROR CORRECTION MODEL: An Application to Some Nigeria Macroeconomic Variables
►Olanrewaju I. Shittu, Raphael A. Yemitan and OlaOluwa S. Yaya
This paper reviews the use of the traditional ARDL and the ARDL approach to cointegration for the analysis of short-run dynamic and long run relationship when series are difference stationary (series can be integrated of different orders). The two models were used to estimate the short-run dynamics and the long run relationships between selected Nigeria’s macroeconomic series. The results compares favorably with the theory that the ARDL is equivalent to the short-run dynamics of the error correction model (the resultant model from the ARDL approach to cointegration).
Keywords: Autoregressive distributed lag, Cointegration, Error correction, Inflation, Gross domestic product (GDP), Time Series Econometrics.
MEASUREMENT AND DISCLOSURE OF INTELLECTUAL CAPITAL IN A DEVELOPING COUNTRY: An Exploratory Study
►Madan Lal Bhasin
In today’s knowledge-based economy, measurement, management and disclosure of intellectual capital (IC) are very crucial for enhancing business performance and economic growth, both in manufacturing as well as service organizations. This study attempts to provide an insight into the style of IC disclosures and measurements done by the Indian companies. First, a longitudinal study was carried out to analyze how three Indian firms--Reliance Industries Limited, Balrampur Chini Mills and Shree Cement Limited--disclose their IC reports. Second, in order to survey the recent IC measurement scenario, we conducted another study of 8 Indian pharmaceutical companies in which the market value added (MVA) approach is applied for measuring IC on their 2004-05 to 2008-09 annual reports. Also, it seeks to measure the effectiveness of IC as compared to tangible assets (TA) for the selected companies. On an average, the selected pharmaceutical companies reported a positive value of IC; significant correlation has been noticed between TA and net operating profits. However, no significant difference was found between percentage of IC to MV and percentage of TA to MV. The results of longitudinal study confirmed that IC disclosure in these companies is almost negligible and its disclosure had not received any preference from the mentors of these corporations. IC reports may initially be used for ‘internal’ management purposes; but an ‘external’ stakeholder-focus of IC report should be the ultimate goal. Unfortunately, the omission of IC information may adversely influence the quality of decisions made by shareholders, or lead to material misstatements.
Keywords: Disclosure, measurement, intellectual capital, intangible assets, developing country, exploratory study.