AN EMPIRICAL EVIDENCE ON IMPACT OF CREDIT MANAGEMENT, LIQUIDITY POSITION AND PROFITABILITY OF NIGERIAN BANKING SECTOR (Published)
The study critically examines the relationship between credit management, liquidity position and profitability of some selected banks in Nigeria using annual data of ten banks over the period of 2006 to 2010. Time series properties of all variables used in the estimation were examined through Augmented Dickey Fuller (ADF) test in order to obtain reliable results. It shows that all the variables were stationary and significant at first differences. The results from Ordinary Least Square (OLS) estimate found that current ratio is positively related to debt ratio and significant at 1% level. This confirms the alternative “risk absorption” hypothesis, which stipulates that efficient credit management enhances firms’ ability to create liquidity. In addition, the result shows that ROA has significant positive effect on current ratio confirming the “financial fragility – crowding out” hypothesis which stipulate that the ability of firms’ to maintain certain degree of liquidity reduces firms’ profitability enhancement. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that when a company’s credit policy is favourable, liquidity is at a desirable level and lastly, the findings revealed that companies should ensure the monitoring and regular review of their credit policy and the allowance of cash discounts should be minimized as much as possible
Keywords: Credit management, Nigeria, Regression, commercial bank, liquidity position, profitability
EMPIRICAL EVIDENCE BETWEEN PUBLIC POLICY AND BUSINESS ORGANIZATION IN NIGERIA (Published)
This paper empirically examines the causal relationship between public policy and its impact on business organisation. Data collections are mainly secondary over the period of 1980 to 2010. The study hypothesized negative relationship between inflation rate; value added tax; exchange rate and economic growth. Collected data were regressed using OLS technique and Augmented Dickey Fuller to test for the stationarity of the variables. Findings indicate a negative relationship between Public Policy and Return on Assets (ROA) while that of value added and exchange rate conforms with the apriori expectation of positive relationship and inflation maintains a negative relation. Hence, it is therefore recommended that Nigeria government should be consistent with a policy framework that is creditably maintained (fiscal stance, exchange rate policy, interest rate policy, pricing policy, etc) and the policy makers should also create credibility including political will in order to spur investor confidence for both local and foreign investments.
Keywords: Augmented Dickey Fuller, Business Organisation, Nigeria, Public Policy, Regression
