This study examined the impact of financial innovation on money demand in Nigeria, using quarterly time series for the period 2009-2019. The dependent variable was money demand, represented by broad money, while the independent variable was financial innovation represented by modern payment channels such as volume of Automated Teller Machines (ATMs) transactions, volume of Point of Sales (POS) transactions, volume of Internet banking transactions, and volume of Mobile banking transactions. The study employed the ordinary least squares (OLS) regression technique as the estimation method within the cointegration, granger causality, and error correction modeling. The result obtained showed that financial innovation has mixed impact on money demand in Nigeria during the period of analysis. For instance, financial innovation has positive impact on money demand through volume of ATM transactions in the current period, two periods lagged of volume of mobile banking transactions, current period and one period lagged of volume of internet banking transactions, and current period’s volume of Point of Sales (POS) transactions in Nigeria. On the other hand, financial innovation has negative impact on money demand through one period lagged of volume of point of sales in Nigeria. On the stability of the demand for money function, the result of the stability tests based on the CUSUM test and CUSUM of squares test showed that the demand for money function was stable during the evaluation period. The study recommended that monetary policy strategy of the central bank of Nigeria (CBN) should be fine-tuned to ensure it is well suited to deal with the challenges posed by financial innovation by way of proliferation of sophisticated payment channels.
Equity financing is one of the sources of funding available to non-bank financial institutions which is quite prevalent in developed financial markets for small or start-up firms. This study empirically determined the effect of the Equity Financing Scheme on a sustainable increase in productivity of agro-allied small businesses in Nigeria. Data for this study were elicited through the use of a questionnaire structured in a five-point likert scale. The evaluation of the relationship between the dependent and independent variables was performed using the Ordinary Least Square regression technique. The study revealed that the equity financing scheme had a positive and significant effect on the sustainable productivity of agro-allied small businesses in South-South Nigeria. The study recommended that efforts should be made to educate the small business entrepreneurs on the benefits of equity financing as a viable option towards business growth and expansion and that the government through the various intervention agencies should restructure the long-term loan policies to give access to more growth-oriented agro-allied businesses, to increase their presently low capacity to procure heavy-duty technology to increase productivity and achieve food security in Nigeria. Small business owners should take advantage of the membership of cooperative societies and as well maintain good business relationships with suppliers; this will guarantee a continuous supply of needed materials and uninterrupted operations of the business.
American Research Journal of Humanities & Social Science (ARJHSS) is a double blind peer reviewed, open access journal published by (ARJHSS).
The main objective of ARJHSS is to provide an intellectual platform for the international scholars. ARJHSS aims to promote interdisciplinary studies in Humanities & Social Science and become the leading journal in Humanities & Social Science in the world.
What are the Stimulating Factors Affecting NPL in Banking Sector of Banglades...ijtsrd
A well organized, well structured and developed financial sector ensures efficient allocation of financial resources and perks up the competitiveness of the private sector, thereby promoting investment and growth in the real sector. The thrust of the development is to improve the regulatory and governance environment and to enhance the ability of bank owners, management and regulators, and the markets themselves to provide for better governance and regulation to achieve the objectives. In this perspective, improvement of the situation of non performing loan is important. A high volume of non performing loan can never be a boon for the economy. Credit to economy is the main source for financial support of business. On the other side, banks have limited investment tools for their deposits. This study present results from an econometric analysis, favorably Random Effect Model, using pooled panel data collected from the central bank of Bangladesh categorizing four sectors of banking based on the pattern of ownership. Based on the analysis of the bank specific microeconomic factors, which are selected on the availability from reliable sources, used as the regressors, it is observed that the liquidity and the management soundness is more significantly affect the Non performing loan NPL in Bangladesh. Therefore, the recommendation is placed towards formulation policy instruments in favor of solvency rather liquidity. In addition to that, the improvement of managerial efficiency must be sought as well. Ratna Biswas | Mohammed Nazrul Islam | Chanu Gopal Ghosh ""What are the Stimulating Factors Affecting NPL in Banking Sector of Bangladesh? Evidence from Econometric Exercises"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020, URL: https://www.ijtsrd.com/papers/ijtsrd29861.pdf
Paper Url : https://www.ijtsrd.com/economics/financial-economics/29861/what-are-the-stimulating-factors-affecting-npl-in-banking-sector-of-bangladesh-evidence-from-econometric-exercises/ratna-biswas
Equity financing is one of the sources of funding available to non-bank financial institutions which is quite prevalent in developed financial markets for small or start-up firms. This study empirically determined the effect of the Equity Financing Scheme on a sustainable increase in productivity of agro-allied small businesses in Nigeria. Data for this study were elicited through the use of a questionnaire structured in a five-point likert scale. The evaluation of the relationship between the dependent and independent variables was performed using the Ordinary Least Square regression technique. The study revealed that the equity financing scheme had a positive and significant effect on the sustainable productivity of agro-allied small businesses in South-South Nigeria. The study recommended that efforts should be made to educate the small business entrepreneurs on the benefits of equity financing as a viable option towards business growth and expansion and that the government through the various intervention agencies should restructure the long-term loan policies to give access to more growth-oriented agro-allied businesses, to increase their presently low capacity to procure heavy-duty technology to increase productivity and achieve food security in Nigeria. Small business owners should take advantage of the membership of cooperative societies and as well maintain good business relationships with suppliers; this will guarantee a continuous supply of needed materials and uninterrupted operations of the business.
American Research Journal of Humanities & Social Science (ARJHSS) is a double blind peer reviewed, open access journal published by (ARJHSS).
The main objective of ARJHSS is to provide an intellectual platform for the international scholars. ARJHSS aims to promote interdisciplinary studies in Humanities & Social Science and become the leading journal in Humanities & Social Science in the world.
What are the Stimulating Factors Affecting NPL in Banking Sector of Banglades...ijtsrd
A well organized, well structured and developed financial sector ensures efficient allocation of financial resources and perks up the competitiveness of the private sector, thereby promoting investment and growth in the real sector. The thrust of the development is to improve the regulatory and governance environment and to enhance the ability of bank owners, management and regulators, and the markets themselves to provide for better governance and regulation to achieve the objectives. In this perspective, improvement of the situation of non performing loan is important. A high volume of non performing loan can never be a boon for the economy. Credit to economy is the main source for financial support of business. On the other side, banks have limited investment tools for their deposits. This study present results from an econometric analysis, favorably Random Effect Model, using pooled panel data collected from the central bank of Bangladesh categorizing four sectors of banking based on the pattern of ownership. Based on the analysis of the bank specific microeconomic factors, which are selected on the availability from reliable sources, used as the regressors, it is observed that the liquidity and the management soundness is more significantly affect the Non performing loan NPL in Bangladesh. Therefore, the recommendation is placed towards formulation policy instruments in favor of solvency rather liquidity. In addition to that, the improvement of managerial efficiency must be sought as well. Ratna Biswas | Mohammed Nazrul Islam | Chanu Gopal Ghosh ""What are the Stimulating Factors Affecting NPL in Banking Sector of Bangladesh? Evidence from Econometric Exercises"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020, URL: https://www.ijtsrd.com/papers/ijtsrd29861.pdf
Paper Url : https://www.ijtsrd.com/economics/financial-economics/29861/what-are-the-stimulating-factors-affecting-npl-in-banking-sector-of-bangladesh-evidence-from-econometric-exercises/ratna-biswas
The Infrastructure sector has been the key driver for the Indian economy. The sector is critically important for sustaining the momentum of the economic growth, and the Government has undertaken policy interventions and initiatives to boost the sector.
Foreign Direct Investment (FDI) received in the construction sector (including townships, housing and built-up infrastructure) from April 2000 to March 2017 is estimated at USD 24.3 billion.
CII, over the years, has been working very closely with stakeholders across the infrastructure verticals to stimulate greater private sector investment. This edition of the Policy Watch focuses on the infrastructure sector.
Cashless Policy and Financial Performance of Deposit Money Banks in Nigeriaijtsrd
The study investigated the effect of Central Bank of Nigeria Cash less Policy and the Financial Performance of Deposit Money Banks in Nigeria. A panel data were collected from a sample of 14 banks covering 6 years spanning from 2012 when the policy was introduced in Nigeria to 2017. The study used return on Asset as proxy for bank performance while the value transactions done through the ATM, POS, Internet Banking, NIP and NEFT platforms E banking Products were used to proxy cash less policy. In other to ensure the validity and the reliability of our data, we therefore subjected our data to a diagnostic test using Descriptive Statistic Analysis, Multicolinearity test, Correlation testing, and Herteroskadaticity testing. Findings from the study revealed that that ATMV has a positive and significant effect on return on assets ROA of banks in Nigeria while , POSV, WEBV, NIPV and NEFV were found to have a positive but insignificant effect on ROA of quoted banks in Nigeria. The study concluded that E banking products as a proxy for cash less policy has positive effect on the financial performance of Deposit Money Banks in Nigeria. It was thus recommended among others that bank management should pay more attention on the activities that will improve the ATM services if they wish to increase the ROA. Muotolu, Peace Chikwemma | Nwadialor, E. O ""Cashless Policy and Financial Performance of Deposit Money Banks in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-4 , June 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23835.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/23835/cashless-policy-and-financial-performance-of-deposit-money-banks-in-nigeria/muotolu-peace-chikwemma
The paper assesses the effectiveness of commercial bank loans as sources of funding Small and Medium Enterprises
(SMEs) in Southeast, Nigeria. A cross-sectional survey method wherein structured questionnaire was used to collect
data was adopted. A sample of 500 respondents was randomly selected from the five industrial hubs in the five states
of Southeast, namely Nnewi, Aba, Enugu, Abakiliki, and Owerri. With the aid of pecking order theory
(POT)/hypothesis of Lending, percentage formula, and SPSS version 20.0 tools, the data generated from the
respondents were analysed. Among others, the results of the analysis reveal that SMEs and commercial banks are
highly indifferent to the loans facilities; strict collateral requirements, high interest rates, and the nature of
requirements for guarantors dissuade SMEs from accessing loans; and government interventions provided palliative
measures but failed to address the problems associated with the loans. Therefore, this paper recommends policy
reforms to reduce interest rate, collateral and guarantor requirements. Further research on how to modernise and
harmonise other external sources of SME funding such as „daily contribution‟ and „Isusu‟ systems is required.
Changing Issues Related to Declining of Non-Performing Assets in Banksijtsrd
This paper explores an empirical approach to the analysis of Non Performance Assets NPAs of public, private, and foreign sector banks in India. the NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. This paper aims to find the fundamental factors which impact NPAs of banks. A model consisting oftivo types of factors, viz., macroeco nomie factors and bank specific parameters, is developed arid the behavior of NPAs of the three categories of banks is observed. The empirical analysis assesses how macroeconomic factors and bank specific parameters affect NPAs of a particular category of banks. The results show that movement in NPAs over the years can be explained well by the factors considered in the model for the public and private sector banks. The other important results derived from the analysis include the finding that banks exposure to priority sector lending educes NPAs. The Impact of competitive culture of public,, private, and foreign sector banks in India with in themselves helpes in declining of NPAs from banks. Dr. Mohan S. Rode "Changing Issues Related to Declining of Non-Performing Assets in Banks" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29684.pdf Paper URL: https://www.ijtsrd.com/management/other/29684/changing-issues-related-to-declining-of-non-performing-assets-in-banks/dr-mohan-s-rode
IMPACT ON INDIAN BANKS’ PROFITABILITY INDICATORS – AN EMPIRICAL STUDYIAEME Publication
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.
Stressed Assets Effect on Post Merger Scheduled Commercial Banks in Indiaijtsrd
The global banking reform agenda made further progress in 2017 '18, the Reserve Bank of India ushered in a revised framework with the insolvency and bankruptcy code as the focal point in pursuit of declogging of bank's balance sheets from overhang of stressed assets. Going forward, issues such as recapitalization, improvement in banks' corporate governance, implementation of Ind AS and containment of cybersecurity risks may assume prominence. Indian banks will continue to face deterioration in their non performing assets NPAs or bad loans due to the current economic conditions in the current fiscal year 2019 20 . The gross non performing assets GNPAs plus restructured standard advances in the banking system remained elevated at 12.1 percent of gross advances at end March 2018. Going forward, the stress tests carried out by the Reserve Bank suggest that under the baseline assumption of the current economic situation prevailing, the GNPA ratio of scheduled commercial banks SCBs may increase further in 2018 19."" The aggregate gross NPAs of SCBs increased primarily as a result of this transparent recognition of stressed assets as NPAs, from Rs 3,23,464 Crore, as on March 31, 2015, to Rs 10,35,528 crore, as on March 31, 2018. Dr. S. Gautami | Dr. Nalla Bala Kalyan ""Stressed Assets Effect on Post Merger Scheduled Commercial Banks in India"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020,
URL: https://www.ijtsrd.com/papers/ijtsrd30234.pdf
Paper Url : https://www.ijtsrd.com/management/equality-diversity-and-inclusion/30234/stressed-assets-effect-on-post-merger-scheduled-commercial-banks-in-india/dr-s-gautami
An Assessment of the role of Financial literacy on Performance of Small and M...World-Academic Journal
The purpose of this study was to assess the effects of the financial literacy education on performance of small and micro enterprises in Njoro District where the program was implemented since 2011. The study investigated the financial literacy skills imparted, and their role on performance of small scale enterprises. Specific objectives of the study were: to establish how book keeping skills influence performance of MSEs under that EGF financial literacy programme in Njoro District, to establish the effects of credit management skills on performance of SMEs under EGF financial literacy programme in Njoro District and to find out how budgeting skills affect performance of SMEs under that EGF financial literacy programme in Njoro District. Descriptive survey research design was used to guide the study. The target population for the study was 467 beneficiaries of equity group foundation project in Njoro District. A sample size of 82 was selected random sampling technique. Primary data was obtained using questionnaires administered to the selected program beneficiaries. Data collected was then organized, coded and entered in the computer for analysis. Analysis was done using frequency counts, percentages, means and standard deviation, t-test was used to analyses the difference in performance before and after training. The study found out that: the program emphasized on budgeting, financial analysis, credit management and book keeping skills; indeed there was a significant improvement in revenue performance of small enterprises whose managers had attended the financial literacy programme. Credit management skills obtained through the financial literacy programme enhanced performance through acquisition of credit financing, and management of loan portfolios to ensure that loan liability was minimized and interest expenses minimized. Budgeting skills significant roles in growing sales, profits and ensuring smooth running of the business. The impact of this programme is evident in enhancing business performance. The government should therefore fund the mainstreaming financial literacy training programmes throughout the country as a strategy for enhancing small and micro enterprise performance.
Indian Banking Moving towards a new landscape - Current Status and Trends of...Resurgent India
As per the RBI's financial stability report, the gross non-performing advances (GNPAs) of SCBs as percentage of gross advances increased to 4.6 per cent from 4.5 per cent between September 2014 and March 2015
Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghanaijtsrd
The purpose of current paper is to examine the impact of bank governance CG on cash holdings CH of universal banks in Ghana. Different characteristics of CG including board independence, board size, insider ownership and CEO duality were examined to check their impact on CH of banks. The panel data on 25 universal banks covering the period of 2009 2018 were used for the study. The panel least square repression model was utilized where the Eviews computer software version 11.0 was used for analysis of the data. The correlations analysis and Panel least square regression were used as the key analytical techniques. Findings from the study reveal that, Board size, working capital and Bank size constitute the predominant statistically significant factors that contributes to cash holdings among the universal banks. Hence Board size as significant corporate governance dimension has negative effect on cash holdings as it reduces cash holdings of the banks. The results show that CEO Duality has a positive but insignificant impact on Cash Holdings of the universal banks while board independent and insider ownership have negative but statistically insignificant influence on cash holdings of the universal banks. The study contributes to shaping the Bank governance policies for universal banks and the financial sector in the developing countries. Samuel Asubonteng | Yusheng Kong "Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd38139.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/38139/analysis-of-the-influence-of-bank-governance-on-cash-holdings-of-banks-in-ghana/samuel-asubonteng
The Infrastructure sector has been the key driver for the Indian economy. The sector is critically important for sustaining the momentum of the economic growth, and the Government has undertaken policy interventions and initiatives to boost the sector.
Foreign Direct Investment (FDI) received in the construction sector (including townships, housing and built-up infrastructure) from April 2000 to March 2017 is estimated at USD 24.3 billion.
CII, over the years, has been working very closely with stakeholders across the infrastructure verticals to stimulate greater private sector investment. This edition of the Policy Watch focuses on the infrastructure sector.
Cashless Policy and Financial Performance of Deposit Money Banks in Nigeriaijtsrd
The study investigated the effect of Central Bank of Nigeria Cash less Policy and the Financial Performance of Deposit Money Banks in Nigeria. A panel data were collected from a sample of 14 banks covering 6 years spanning from 2012 when the policy was introduced in Nigeria to 2017. The study used return on Asset as proxy for bank performance while the value transactions done through the ATM, POS, Internet Banking, NIP and NEFT platforms E banking Products were used to proxy cash less policy. In other to ensure the validity and the reliability of our data, we therefore subjected our data to a diagnostic test using Descriptive Statistic Analysis, Multicolinearity test, Correlation testing, and Herteroskadaticity testing. Findings from the study revealed that that ATMV has a positive and significant effect on return on assets ROA of banks in Nigeria while , POSV, WEBV, NIPV and NEFV were found to have a positive but insignificant effect on ROA of quoted banks in Nigeria. The study concluded that E banking products as a proxy for cash less policy has positive effect on the financial performance of Deposit Money Banks in Nigeria. It was thus recommended among others that bank management should pay more attention on the activities that will improve the ATM services if they wish to increase the ROA. Muotolu, Peace Chikwemma | Nwadialor, E. O ""Cashless Policy and Financial Performance of Deposit Money Banks in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-4 , June 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23835.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/23835/cashless-policy-and-financial-performance-of-deposit-money-banks-in-nigeria/muotolu-peace-chikwemma
The paper assesses the effectiveness of commercial bank loans as sources of funding Small and Medium Enterprises
(SMEs) in Southeast, Nigeria. A cross-sectional survey method wherein structured questionnaire was used to collect
data was adopted. A sample of 500 respondents was randomly selected from the five industrial hubs in the five states
of Southeast, namely Nnewi, Aba, Enugu, Abakiliki, and Owerri. With the aid of pecking order theory
(POT)/hypothesis of Lending, percentage formula, and SPSS version 20.0 tools, the data generated from the
respondents were analysed. Among others, the results of the analysis reveal that SMEs and commercial banks are
highly indifferent to the loans facilities; strict collateral requirements, high interest rates, and the nature of
requirements for guarantors dissuade SMEs from accessing loans; and government interventions provided palliative
measures but failed to address the problems associated with the loans. Therefore, this paper recommends policy
reforms to reduce interest rate, collateral and guarantor requirements. Further research on how to modernise and
harmonise other external sources of SME funding such as „daily contribution‟ and „Isusu‟ systems is required.
Changing Issues Related to Declining of Non-Performing Assets in Banksijtsrd
This paper explores an empirical approach to the analysis of Non Performance Assets NPAs of public, private, and foreign sector banks in India. the NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. This paper aims to find the fundamental factors which impact NPAs of banks. A model consisting oftivo types of factors, viz., macroeco nomie factors and bank specific parameters, is developed arid the behavior of NPAs of the three categories of banks is observed. The empirical analysis assesses how macroeconomic factors and bank specific parameters affect NPAs of a particular category of banks. The results show that movement in NPAs over the years can be explained well by the factors considered in the model for the public and private sector banks. The other important results derived from the analysis include the finding that banks exposure to priority sector lending educes NPAs. The Impact of competitive culture of public,, private, and foreign sector banks in India with in themselves helpes in declining of NPAs from banks. Dr. Mohan S. Rode "Changing Issues Related to Declining of Non-Performing Assets in Banks" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29684.pdf Paper URL: https://www.ijtsrd.com/management/other/29684/changing-issues-related-to-declining-of-non-performing-assets-in-banks/dr-mohan-s-rode
IMPACT ON INDIAN BANKS’ PROFITABILITY INDICATORS – AN EMPIRICAL STUDYIAEME Publication
The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Indian banks are increasingly focusing on adopting integrated approach to risk management. Banks have already embraced the international banking supervision accord of Basel II. According to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline of March 31, 2019. Most of the banks have put in place the framework for asset-liability match, credit and derivatives risk management.
Stressed Assets Effect on Post Merger Scheduled Commercial Banks in Indiaijtsrd
The global banking reform agenda made further progress in 2017 '18, the Reserve Bank of India ushered in a revised framework with the insolvency and bankruptcy code as the focal point in pursuit of declogging of bank's balance sheets from overhang of stressed assets. Going forward, issues such as recapitalization, improvement in banks' corporate governance, implementation of Ind AS and containment of cybersecurity risks may assume prominence. Indian banks will continue to face deterioration in their non performing assets NPAs or bad loans due to the current economic conditions in the current fiscal year 2019 20 . The gross non performing assets GNPAs plus restructured standard advances in the banking system remained elevated at 12.1 percent of gross advances at end March 2018. Going forward, the stress tests carried out by the Reserve Bank suggest that under the baseline assumption of the current economic situation prevailing, the GNPA ratio of scheduled commercial banks SCBs may increase further in 2018 19."" The aggregate gross NPAs of SCBs increased primarily as a result of this transparent recognition of stressed assets as NPAs, from Rs 3,23,464 Crore, as on March 31, 2015, to Rs 10,35,528 crore, as on March 31, 2018. Dr. S. Gautami | Dr. Nalla Bala Kalyan ""Stressed Assets Effect on Post Merger Scheduled Commercial Banks in India"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020,
URL: https://www.ijtsrd.com/papers/ijtsrd30234.pdf
Paper Url : https://www.ijtsrd.com/management/equality-diversity-and-inclusion/30234/stressed-assets-effect-on-post-merger-scheduled-commercial-banks-in-india/dr-s-gautami
An Assessment of the role of Financial literacy on Performance of Small and M...World-Academic Journal
The purpose of this study was to assess the effects of the financial literacy education on performance of small and micro enterprises in Njoro District where the program was implemented since 2011. The study investigated the financial literacy skills imparted, and their role on performance of small scale enterprises. Specific objectives of the study were: to establish how book keeping skills influence performance of MSEs under that EGF financial literacy programme in Njoro District, to establish the effects of credit management skills on performance of SMEs under EGF financial literacy programme in Njoro District and to find out how budgeting skills affect performance of SMEs under that EGF financial literacy programme in Njoro District. Descriptive survey research design was used to guide the study. The target population for the study was 467 beneficiaries of equity group foundation project in Njoro District. A sample size of 82 was selected random sampling technique. Primary data was obtained using questionnaires administered to the selected program beneficiaries. Data collected was then organized, coded and entered in the computer for analysis. Analysis was done using frequency counts, percentages, means and standard deviation, t-test was used to analyses the difference in performance before and after training. The study found out that: the program emphasized on budgeting, financial analysis, credit management and book keeping skills; indeed there was a significant improvement in revenue performance of small enterprises whose managers had attended the financial literacy programme. Credit management skills obtained through the financial literacy programme enhanced performance through acquisition of credit financing, and management of loan portfolios to ensure that loan liability was minimized and interest expenses minimized. Budgeting skills significant roles in growing sales, profits and ensuring smooth running of the business. The impact of this programme is evident in enhancing business performance. The government should therefore fund the mainstreaming financial literacy training programmes throughout the country as a strategy for enhancing small and micro enterprise performance.
Indian Banking Moving towards a new landscape - Current Status and Trends of...Resurgent India
As per the RBI's financial stability report, the gross non-performing advances (GNPAs) of SCBs as percentage of gross advances increased to 4.6 per cent from 4.5 per cent between September 2014 and March 2015
Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghanaijtsrd
The purpose of current paper is to examine the impact of bank governance CG on cash holdings CH of universal banks in Ghana. Different characteristics of CG including board independence, board size, insider ownership and CEO duality were examined to check their impact on CH of banks. The panel data on 25 universal banks covering the period of 2009 2018 were used for the study. The panel least square repression model was utilized where the Eviews computer software version 11.0 was used for analysis of the data. The correlations analysis and Panel least square regression were used as the key analytical techniques. Findings from the study reveal that, Board size, working capital and Bank size constitute the predominant statistically significant factors that contributes to cash holdings among the universal banks. Hence Board size as significant corporate governance dimension has negative effect on cash holdings as it reduces cash holdings of the banks. The results show that CEO Duality has a positive but insignificant impact on Cash Holdings of the universal banks while board independent and insider ownership have negative but statistically insignificant influence on cash holdings of the universal banks. The study contributes to shaping the Bank governance policies for universal banks and the financial sector in the developing countries. Samuel Asubonteng | Yusheng Kong "Analysis of the Influence of Bank Governance on Cash Holdings of Banks in Ghana" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd38139.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/38139/analysis-of-the-influence-of-bank-governance-on-cash-holdings-of-banks-in-ghana/samuel-asubonteng
MEASURING FOREIGN EXCHANGE PRESSURE: A TEXT MINNING APPROACHAJHSSR Journal
ABSTRACT : This study investigates the effectiveness of sentiment analysis, using text-mining approach within
the context of big-data analytics, in measuring foreign exchange pressure in Nigeria. It begins with the construction
of two sentiment-based index of foreign exchange pressure; the first, labelled EMP, constructed by text-mining
public sentiments about foreign exchange management in Nigeria, within the platform of twitter, while the second,
labelled EMP_Trend, constructed from Google Trend as an index of sampled search of related words around foreign
management in Nigeria. Thereafter, the study tested the effectiveness of both indices in signaling movement in
exchange rate (IEW) in Nigeria relative to existing traditional measures of foreign exchange pressure in Nigeria.
The Predictive Regression Model (PRM) and Clark and West (2007) frameworks were employed. Findings from
the study suggest that foreign exchange market pressure index using Sentiment Analysis may hold sufficient
information in predicting and signaling movement in exchange rate (IEW) in Nigeria. Specifically, EMP_Trend
and EMP were found to improve the forecast of IEW, as their estimated Clark and West coefficients were both
positive and statistically significant at 5 per cent. The study recommends that monetary authorities leverage
sentiment analysis to monitor future direction in exchange rate, with a view to implementing policies that would
moderate the prevailing instability in the foreign exchange market in the Nigeria.
KEYWORDS: Foreign Exchange Pressure, Sentiment Analysis, Text-mining, leading indicator, predictive
regression model.
Effect of Financial Innovation on the Performance of Deposit Money Banks in N...ijtsrd
This study centres on financial innovation and performance of deposit money banks in Nigeria. The main objective is to ascertain the effect of financial innovation on the performance of deposit money banks in Nigeria. The specific objectives are to evaluate the effect of automated teller machine, point of sale, web internet transfer and mobility of payment on the performance of deposit money banks in Nigeria proxied by the value of commercial bank deposits in Nigeria. The data employed were secondary data obtained from the Central Bank of Nigeria Statistical Bulletin for the period 2009 2020. This study employed ordinary least square OLS method of estimation to establish the effect of the independent variables on the dependent variable. The OLS is the most efficient method because of the ’’Best Linear Unbiased Estimator’’ BLUE properties. The analysis revealed that point of sale, payment mobility, automated teller machine and web internet had positive effect on the performance of deposit money banks in Nigeria for the period under study. This depicts that financial innovation helps in increasing profitability and return on assets of deposit money banks in Nigeria. Therefore, the study recommends among others that the government should put in place proper monetary and fiscal policies in order to promote financial innovations in Nigeria as the investigations in this study have proved to engender performance of deposit money banks in Nigeria. Chigozie Camillus Ibe | Dr. Chinedu Blessing-Mike Obialor "Effect of Financial Innovation on the Performance of Deposit Money Banks in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd52040.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/52040/effect-of-financial-innovation-on-the-performance-of-deposit-money-banks-in-nigeria/chigozie-camillus-ibe
Financial Development and Economic Growth Nexus in Nigeriaiosrjce
The study assessed the impact of financial development on economic growth in Nigeria using time
series data from 1970 to 2012. The Autoregressive Distributed Lag bounds testing approach to cointegration
was utilized for this study. The result from the ARDL model indicate that the variables for this study are
cointegrated while the error correction term appeared significant and confirms that short-run disequilibria are
corrected up to about 50 percent annually. The empirical results reveals that financial development exerts
positive and significant impact on economic growth in the long-run while trade liberalization variables exert
negative impact on economic growth in the long-run indicating non-competitive nature of non-oil domestic
products in the international market. In the short-run, domestic credit is insignificant which indicates a dearth
of investible funds in the economy. There is evidence that financial development policies influence economic
growth in the long-run and not in the short-run. This study among others recommends the urgent need to
implement policies that will strengthen the deposit mobilization and intermediation efforts in the banking system
in other to deepen the financial system. Nigerian trade performance should be improved through economic
diversification and further availability of funds to private sector at competitive interest rate in order to produce
internationally competitive products.
Exploring Digital Payments, Financial Inclusion, and Monetary Policy in Indiaijtsrd
The global financial landscape has undergone a profound transformation with the advent of digital payment technologies, influencing monetary policy paradigms and fostering financial inclusion initiatives. This research investigates the interplay between digital payments, financial inclusivity, and their relationship with the overarching objectives of monetary policy. The study delves into the multifaceted impact of digital payment systems on the attainment of monetary policy goals. It scrutinizes the role of digital financial services in fostering greater access to financial resources for underserved populations, thereby addressing issues of financial exclusion. Moreover, it assesses the implications of enhanced financial inclusivity on broader economic variables, such as consumption patterns, savings behavior, and income distribution, which are pivotal concerns for central banks in their pursuit of stability and growth. Furthermore, the research analyzes the efficacy of digital payment infrastructures in influencing the transmission mechanisms of monetary policy. It investigates how these technologies may alter the velocity of money, liquidity preferences, and the effectiveness of policy tools in steering economic variables toward desired targets, such as price stability and sustainable growth. The findings of this research are expected to contribute to policy discourse by providing a nuanced understanding of how leveraging digital payment innovations can potentially align with and augment the efficacy of monetary policy frameworks. Ultimately, it seeks to offer recommendations for policymakers, financial institutions, and regulators to leverage digital finance as a catalyst for advancing both financial inclusion goals and the broader aims of monetary policy in an increasingly digitalized global economy. Dr. J. Suresh Kumar | Dr. D. Shobana "Exploring Digital Payments, Financial Inclusion, and Monetary Policy in India" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd63443.pdf Paper Url: https://www.ijtsrd.com/economics/financial-economics/63443/exploring-digital-payments-financial-inclusion-and-monetary-policy-in-india/dr-j-suresh-kumar
Effect of Monetary Policy on Economic Growth in Nigeriaijtsrd
"The chequered history of the Nigeria monetary policy has created a visible asymmetry in the two known monetary regimes before and after SAP in the country. Years after the Structural Adjustment Programme SAP , the Nigeria economy grew to become the strongest economy in Africa and suddenly plunging into recession, a situation that have adversely affected the growth and development of the economy by ways of rising unemployment rate, soaring poverty and swollen external debt, thus suggesting that the failure of the monetary policy in curbing price instability has caused growth instability as Nigeria's record of growth and development has become very poor. This study therefore examines the effect of monetary policy on economic growth in Nigeria using secondary data covering the period of 1980 2017 that were sourced from the Central Bank of Nigeria statistical bulletin. The model's estimates were estimated via multiple econometric model of the ordinary least square to ascertain the effect of money supply, credit in the economy, interest rate on credit, infrastructure, inflationary rate, external debts, price index on growth in Nigeria. The results show that money supply, interest rate on credit, infrastructure and external debt were statistically significant in explaining its impacts on economic growth while other variables used in the study were all found to be statistically insignificant in explaining the growth rate of the Nigerian economy. The study recommends among others that for effective operation of the monetary policy measures in the Nigerian economy, the Central Bank of Nigeria should be granted full autonomy on its monetary policy functions. Partial autonomy should be replaced with full autonomy for the central banks in the developing economies at large which is invariably subjected to government interference and its politics. Onwuteaka, Ifeoma Cecilia | Okoye, P. V. C | Molokwu, Ifeoma Mirian ""Effect of Monetary Policy on Economic Growth in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-3 , April 2019, URL: https://www.ijtsrd.com/papers/ijtsrd22984.pdf
Paper URL: https://www.ijtsrd.com/humanities-and-the-arts/economics/22984/effect-of-monetary-policy-on-economic-growth-in-nigeria/onwuteaka-ifeoma-cecilia"
The study gauged the influence of exchange rate fluctuations on the Performance of the Nigerian Economy over the time from of 1986 to 2016, utilizing secondary data tracked from the statistical report of the Apex Nigerian bank, and utilizing techniques such as Unit root test, Generalized autoregressive conditional heteroscedasticity (GARCH), Impulse-Response Output and Variance-Decomposition Test to evaluate variables such as Interest rate, inflation rate, exchange rate against a sole indicator of Economic Performance I.e. Gross Domestic Product Growth rate (GDPGR), it was discovered that despite the short run influx of the spill over volatility of Interest rate and inflation rate, there exist no long run volatility influence of interest rate on Economic Performance in Nigeria. It was therefore recommended that the apex financial institution and relevant policy makers should ensure an interest rate system and status that could stimulate growth or production and the nation should endeavour to utilize her interest rate in controlling its output level as it motivates Economic Performance (GDPGR).
This study examined the influence of the characteristics of the audit committee on Palestinian firms’ value. The research explores precisely the effect on the Audit Committee characteristics’ efficiency, namely, independence, expertise, evaluating the relationship among dependent and independent variables. Secondary data collected from a list of companies were registered in the Palestine Stock Exchange from 2011 to 2018. Individual variables considered are the independence & expertise of the audit committee, whereas the ROA is employed as the dependent variable as an indicator of a firm’s value. The results showed that the Audit Committee’s independence & expertise substantially positive with ROA. The study concluded that the audit committee’s characteristics are enhancing firm performance. The implications of this study’s findings can be used by decisions and policymakers, the firm’s management, and other stockholders’ interests to create reliable ties between agents and the principals.
There is increasing acceptability of emotional intelligence as a major factor in personality assessment and effective human resource management. Emotional intelligence as the ability to build capacity, empathize, co-operate, motivate and develop others cannot be divorced from both effective performance and human resource management systems. The human person is crucial in defining organizational leadership and fortunes in terms of challenges and opportunities and walking across both multinational and bilateral relationships. The growing complexity of the business world requires a great deal of self-confidence, integrity, communication, conflict, and diversity management to keep the global enterprise within the paths of productivity and sustainability. Using the exploratory research design and 255 participants the result of this original study indicates a strong positive correlation between emotional intelligence and effective human resource management. The paper offers suggestions on further studies between emotional intelligence and human capital development and recommends conflict management as an integral part of effective human resource management.
This paper examines the role of loan characteristics in mortgage default probability for different mortgage lenders in the UK. The accuracy of default prediction is tested with two statistical methods, a probit model and linear discriminant analysis, using a unique dataset of defaulted commercial loan portfolios provided by sixty-six financial institutions. Both models establish that the attributes of the underlying real estate asset and the lender are significant factors in determining default probability for commercial mortgages. In addition to traditional risk factors such as loan-to-value and debt servicing coverage ratio lenders and regulators should consider loan characteristics to assess more accurately probabilities of default.
This study seeks to evaluate the impact of public borrowing on economic growth in Nigeria using time series data from 1980 to 2018. Specifically, the study seeks to analyze the effect of domestic debt (proxy by Federal Government Bonds-FGB) and external debt (proxy by International Monetary Fund Loan-IMFL) on Nigerian’s Gross Domestic Product (GDP). To achieve this objective, secondary data was collected from the Central Bank of Nigeria Statistical bulleting and the Debt Management Office of Nigeria. A multiple regression model involving the dependent variable (GDP) and the independent variables (FGB and IMFL) was formulated and subjected to econometric analysis. These variables were adjusted with the Jarque-bera test of normality while the correlation result was used to check the possibility of multi-collinearity among the variables. The t-test was used to answer the research questions and test the formulated hypotheses at the 5percent statistical level. Results from the analysis show that a positive relationship exists between IMF Loan and Nigeria’s gross domestic product, while a negative relationship exists between FG Bonds and Nigeria’s gross domestic product, which violates the Keynesian theory of public debt. The study concludes that both domestic and external debt significantly affect economic growth in Nigeria. Therefore, it was recommended that public borrowing should be efficiently used and contracted solely for economic reasons and not for social or political reasons as this will help to avoid accumulation of debt stock over time.
Equity investment financing is an innovative way of financing the real sector which has considerable developmental potential. The study empirically determined the effect of Equity investment financing on sustainable increase in productivity among agro-allied small businesses in South-South Nigeria. The instrument of data collection is the research questions structured in a five-point likert scale. The evaluation of the relationship between the dependent and independent variables was performed using the Ordinary Least Square regression technique. The study revealed that equity investment financing has a positive and significant effect on the sustainable productivity of businesses in Nigeria. The study recommended educating small business entrepreneurs on the benefits of equity financing as a viable option towards business growth and expansion and that the government through the various intervention agencies should restructure the long-term loan policies to give access to more growth-oriented agro-allied businesses, to increase their presently low capacity to procure heavy-duty technology to increase productivity and achieve food security in Nigeria. Small business owners should take advantage of the membership of cooperative societies and as well maintain good business relationships with suppliers; this will guarantee a continuous supply of needed materials and uninterrupted operations of the business.
This paper aims to explore the relationships of the performance of producer responsibility organizations (PROs) for waste oil, waste electrical and electronic equipment (WEEE), and end-of-life vehicles (ELV). The methodology consists in estimating the cointegration equations between the variables of lubricating oil production (SIG), electric and electronic equipment (EEE), and vehicle production (VP) using dynamic ordinary least squares (DOLS). Subsequently, elasticities are got based on estimates for Spain over the period 2007-2019 using quarterly data. The main results were that SIG and EEE were cointegrated variables. The elasticity of the SIG variable up to EEE was positive at 2, 4166. Additionally, the elasticity of the SIG variable up to VP was 2, 4050. However, SIG and VP are not cointegrated variables; subsequently, it was not a stable relationship between these variables. Results suggest it was because EPR was applied in WEEE PRO join with a deposit refund system (DRS); meanwhile, EPR in ELV PRO had been applied without subsidies to purchase cars.
In the process of R&D globalization, due to market demand and preferential policies, many multinational companies choose to invest in R&D in China. With the increase of labor costs in coastal areas and the rapid economic development of the central and western regions, multinational companies have already shifted from coastal areas to central and western regions when choosing R&D regions in China, especially in Shaanxi Province. Therefore, studying the character of R&D investment and operating performance of Multinational Corporation in Shaanxi Province has important practical significance. This article uses the data of the R&D investment of multinational corporation in the joint annual inspection of Shaanxi Province in 2018 as the sample and uses EXCEL software to conduct data analysis to gain an in-depth understanding of the character of R&D and investment of multinational corporation in Shaanxi Province, business characteristics and business performance. And it is concluded that the R&D investment of multinational corporation in Shaanxi Province has a series of characteristics such as concentration of distribution, concentration of enterprise scale, and overall good performance of operating performance.
In Bangladesh, migrant worker’s remittances constitute one of the most significant sources of external finance. This paper investigates the existence of relation between remittance inflow and GDP and the causal link between them in Bangladesh by employing the Granger causality test under a VECM framework. Using time series data over a 38 year period, we found that growth in remittances does lead to economic growth in Bangladesh. In addition to the relationship, this paper also points out some issues that are working as impediments in getting remittance and give some recommendations to overcome those impediments.
In the context of the 4.0 revolution, technology applications, especially cloud computing will have strong impacts on all areas, including accounting systems of enterprises. Cloud computing contributes to helping the enterprise accounting apparatus become compact, help automate the input process, improve the accuracy of the input data. Besides, the issur of accounting, reporting, risk control and information security also became better, contributing to improving the effectiveness of accounting. However, besides the positive impacts, businesses also face many difficulties in deploying and applying cloud computing. However, this application requirement will become an inevitable trend contributing to improving the operational efficiency of enterprises. To promote this process requires from the State as well as businesses themselves must have awareness and appropriate decisions. Breakthroughs in information technology have dramatically changed the accounting industry and the creation of financial statements. The Internet and the technologies that use the power of the Internet are playing an important role in the management and accounting activities of businesses - who always tend to be ready to receive and use public innovations technology in collecting, storing, processing and reporting information.
In recent years, Vietnam has joined international intergration by strong export agreements of bilateral and multilateral; Vietnam’s merchandise export in 1995 was only US $5.4 billion, in 2018 Vietnam’s merchandise export increased by 45 times compared to 1995 with US $244 billion. Vietnam’s imports increased by 29 times in 2018 compared to 1995. This study is an attempt to test a method of estimating the influence of exports on several Supply-sidefactors such as production value, value added and imports through the expansion of the standard system W. Leontief I.O and Miyazawa-style economic-demographic relations. This study also tries to make an experiment in the “Leontief Paradox”.The result is that Vietnam’s export value spread to production and imports but spread low to added value, especially in the processing industry group’s fabrication. The study is based on the non-competitive I.O table in 2012 and 2018 with 16 sectors.
The profitability of commercial banks is influenced by a number of internal and external factors. This paper attempts to identify the internal factors which significantly influence the profitability of commercial banks in Bangladesh. In this study, profitability is measured by ROA and ROE which may be significantly influenced by the internal factors such as IRS, NIM, CAR, CR, DG, LD, CTI and SIZE of the bank. Data are collected from published annual reports during 2014--2018 of 23 commercial banks. Using simple regression model, it is found that CR has significant effect on the profitability and CAR has significant influence on ROA only. In addition to this, DG has significant effects on PCBs’ profitability (ROE only) where as IRS and CTI have significant influence on profitability (ROA only) of ICBs. Further, none of these variables have significant effects on the profitability of SCBs but CAR and CR are correlated with profitability (ROA only) and the causes may be the nature of services provided by SCBs to its clients. The internal policy makers should manage the influential internal factors of the banks in order to increase their profitability so that they can meet stakeholders’ expectations.
Using a series of econometric techniques, the study analysed interaction between monetary policy and private sector credit in Ghana. This study made use of monthly dataset spanning January 1999 to December 2019 of credit to the private sector (PSC) and broad money supply (M2). The results reveal that there exists cointegration, a long run stationary relation between monetary policy and private sector credit. This implies, increases in credit should prompt long-term increases in monetary policy. It is not surprising that growth in the private sector might have a stronger effect on monetary policy. The Error Correction Test is statistically significant and that all the variables demonstrate similar adjustment speeds. This implies that in the short run, both money supply and credit are somewhat equally responsive to their last period’s equilibrium error. There is unidirectional causation from private sector credit to monetary policy. It can be said that, there is an interaction between money supply and private sector credit. Thus, credit to private sector holds great potential in promoting economic growth. It can be recommended to the government to increase the credit flow to the private sector because of its strategic importance in creating and generating growth of the economy.
This paper investigates if forecasting models based on Machine Learning (ML) Algorithms are capable to predict intraday prices in the small, frontier stock market of Romania. The results show that this is indeed the case. Moreover, the prediction accuracy of the various models improves as the forecasting horizon increases. Overall, ML forecasting models are superior to the passive buy and hold strategy, as well as to a naïve strategy that always predicts the last known price action will continue. However, we also show that this superior predictive ability cannot be converted into “abnormal”, economically significant profits after considering transaction costs. This implies that intraday stock prices incorporate information within the accepted bounds of weak-form market efficiency, and cannot be “timed” even by sophisticated investors equipped with state of the art ML prediction models.
Applying the Arrow-Debreu-Mundell-Fleming model as an economic standard model, with combining axiological framework and epistemological model, it is proposed to analyze economic policies with using a synthetic model, where interest, exchange and tax rates are integrated together. Except normal monetary and fiscal policies mainly via interest and tax rates, there are feasible ways to utilize modified strategies via exchange and tax rates. When ones need to simulate national local market, ones can raise the exchange rate. Otherwise, when ones need to promote international global trade, ones may lower the exchange rate. It is found that tax reduction is good policy when tax rate is higher than normal and that tax increase is good social policy when tax rate is lower than normal, during economic depression. Also it is revealed that tax reduction is good social policy when tax rate is lower than normal, and that tax increase is good policy when tax rate is higher than normal, during economic overheat. While economic system seeks efficiency and social system pursues equality, common interest modifications with elastic exchange and tax rates could be applied for balancing efficiency and equality.
In recent times, agricultural sector has returned to the forefront of development issues in Nigeria given its contribution to employment creation, sustainable food supply and provision of raw materials to other sectors of the economy. In lieu of that, this study examines the impact of agriculture on the economic growth in Nigeria using annual time series data covering the sample period of 1981 to 2018. To analyse the data collected, Autoregression Distributed Lag (ARDL) model through the bounds testing framework is employed to measure the presence of cointegrating relations between real GDP, agricultural productivity, labour force, and agricultural export. Results show the presence of both short-run and long-run relationship among the variables, and that agriculture has a positive and significant impact on economic growth in Nigeria. These findings inform the Nigerian government on the need to expedite labour force (human capital) and agricultural export (non-oil) development with the view to achieving sustainable growth and development. In addition, developing skills and competencies of labour force through capacity building in the agricultural sector will encourage research and development thereby increase the export size, hence essential for long-term growth.
The article illustrates the results of the economic development of the first fifteen years of the XXI century under the conditions of unprecedented economic freedom, globalization and the appearance of new informational sectors up to and including the first attempts at revising liberalism. The analysis of statistical data demonstrates an obvious increase in the percentage of well-off people in many countries as well as the increased economic capabilities of small, medium and large businesses, whose assets are distributed among an ever-increasing number of owners. This provides the impetus to review our collective approach to liberalization and globalization, as well as to view its unexpected strong sides that make human progress possible.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
Organizational behaviour involves the design of work as well as the psychological, emotional and interpersonal behavioural dynamics that influence organizational performance. Management as a discipline concerned with the study of overseeing activities and supervising people to perform specific tasks is crucial in organizational behaviour and corporate effectiveness. Management emphasizes the design, implementation and arrangement of various administrative and organizational systems for corporate effectiveness. While the individuals, and groups bring their skills, knowledge, values, motives, and attitudes into the organization, and thereby influencing it, the organization, on the other hand, modifies or restructures the individuals and groups through its structure, culture, policies, politics, power, and procedures, and the roles expected to be played by the people in the organization. This study conducted through the exploratory research design involved 125 participants, and result showed strong positive relationship between the variables of interest. The study was never exhaustive due to limitations in terms of time and current relevant literature, therefore, further study could examine the relationship between personality characteristics and performance in the public sector, where productivity is not outstanding, when compared with the private sector. Based on the result of this investigation it was recommended that organizations should provide emotional intelligence programmes for their membership as an important pattern of increasing co-operative behaviours and corporate effectiveness.
This paper scrutinizes Determinants of Capital Structure: A study on some selected corporate firms in Bangladesh. We have taken 10 out of 37 listed companies of DSE dividing into two sectors i.e. Pharmaceuticals and chemicals and Tannery sector, five years data from 2013 to 2017 has been collected from respective annual reports. Total number of observations was 50. There are different factors that affect a firm's capital structure decision. We use leverage (D/E ratio) as dependent variable and independent variables are profitability, tangibility, tax, size, growth, non-debt tax shield (NDTS) and financial costs. By using Descriptive Statistical Analysis, Correlation Analysis and Regression Analysis tools we find that Tangibility, size, NDTS, and financial costs are positively related with leverage and Profitability, tax, and growth are negatively related with leverage. In our analysis we see profitability, tangibility of asset, growth and non-debt tax shield have significant association. So when we take capital structure decision of the above firms we should consider profitability, tangibility of asset, growth and non-debt tax shield because other independent variables are insignificant in the context of Bangladesh economy.
This study assesses the effect of world oil price shocks on Uganda’s official development assis-tance using Structural Vector Autoregressive Model (SVAR). The results in this study show in-significant pass-through effect of world oil price shocks to Uganda’s Official Development As-sistance received in the period under the study. The policy implication in this study is that Offi-cial Development Assistance received by Uganda is independent of world oil price shocks.
More from International Journal of Economics and Financial Research (20)
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
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Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
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2. International Journal of Economics and Financial Research
258
monetary policy decision. For instance, the greater use of this alternative form of money is capable of substituting
for the traditional form of money, which diminishes the demand for money to the extent that it can replace the use of
other liquid financial instruments, thereby undermining the effectiveness of monetary policy formulation.
The relationship between the demand for money and factors determining its behaviour provides the bedrock in
macroeconomic theories and is an important component in the formulation and implementation of monetary policy
in any economy (Goldfeld, 1994). Thus, investigating the impact of financial innovation on money demand is very
expedient because studying how financial innovation affects money demand function will help in the formulation of
effective monetary policy in Nigeria. The objective of this study is to examine the impact of financial innovation on
money demand in Nigeria. The specific objectives are (1) to examine the impact of financial innovation by way of
evolution of modern and sophisticated payment channels on demand for money in Nigeria (2) to test for the stability
of demand for money function in Nigeria. This study is significant in that its findings will provide information on the
performance of the financial system in Nigeria and how the emergence of financial innovation by way of
introduction of modern payment channels has fared in Nigeria. Such assessment will be beneficial to the
government, the monetary authorities, and monetary economists when formulating policies to enhance the
development of the financial sector in Nigeria. The study is segmented into 5 sections. Section 1 is the introduction.
Section 2 reviews empirical studies and theories relating to the study. Section 3 presents the methodology of the
study. Section 4 analyses the results and section 5 concludes the study and offers policy recommendations.
2. Literature Review
2.1. Empirical Studies
Gbadebo and Okunrinboye (2009) carried out investigation on the impact of financial innovation on the demand
for money in Nigeria, utilizing time series data from 1970 to 2004. The study applied the Engle and Granger Two-
Step Co integration technique and found that financial innovation has negative and significant effect on the demand
for money in Nigeria. Other results of this paper showed that interest rate on deposit and treasury bills have negative
impact on the demand for money in Nigeria, while real income and price level are positively related to money
demand in Nigeria.
Hye (2009) undertook investigation on the link between financial innovation and money demand in Pakistan
during the period of 1995-1 to 2007-12 using the robust techniques of co-integration and error correction mechanism
(ECM). The result of the co-integration test showed that that there exists a long run relationship among the variables.
The result of the short run dynamics revealed that financial innovation has statistically significant effect on money
demand in Pakistan both in the long and in the short run. The study revealed that the short run elasticity was larger
than the long run elasticity during the period.
Misati et al. (2010) examined the impact of financial innovation on monetary policy transfer mechanism,
focusing particularly on the impact of financial innovation on the interest rate channel of the monetary transmission
mechanism in Kenya using monthly data covering from 1996 to 2006. Employing the Two Stage Least Squares
(2TLS) technique, the study found that financial innovation has a weakening effect on the interest rate channel of
money transmission mechanism. This result implies that financial innovation has posed a serious challenge to the
conduct of monetary policy in Kenya.
Matthew et al. (2010) examined the effect of financial innovations on demand for money in Nigeria for the
period spanning from 1970 to 2008, using the Engle and Granger Two-Step Cointegration technique. The
cointegration result showed that there was a long run association among the variables. Result of the error correction
model showed that financial innovation has negative and significant influence on money demand in Nigeria.
Sichei1 and Kamau (2012) carried out study on the effect of financial innovation on demand for money in
Kenya, using quarterly data for the period spanning from 1997:4 to 2011:2. The authors used the number of ATMs
as a proxy for financial innovation. The cointegration analysis was performed for the study. The result showed that
there was no significant effect of financial innovations on the demand for money.
Safdar and Khan (2014) carried out a study on the effect of financial innovation on money demand and the
effect of money market disequilibrium on output gap in Pakistan, utilizing the ordinary Least Squares (OLS)
estimation technique. The study used number of Automated Teller Machines (ATMs) as a measure of financial
innovation. The result of the estimation revealed that financial innovation by way of number of ATMs has negative
impact on money demand in Pakistan.
Aliha et al. (2017) empirically examined the impact of financial innovation on money demand for a panel of
215 countries for the period, spanning from 2004 to 2013. The General Method of Moment (GMM) was used in the
estimation of the relationship. The result of this study showed that financial innovation, represented by number of
ATMs has negative effect on money demand. This means that an increase in the number of ATMs by 1% brought
about a decrease in money demand by about 0.01%.
Apere (2017) carried out a study on the impact of financial innovation on demand for money in Nigeria,
utilizing data for the period covering from 1981 to 2016, employing the Vector Autoregression (VAR) methodology
as estimation method. Outcome of the estimation showed that financial innovation has a negative influence on the
demand for money in Nigeria. This according to the author is that as financial innovation increases, people tend to
move away from a more liquid asset to not too liquid assets
Mujuri et al. (2018) investigated the impact of financial innovation on demand for money function in Kenya,
utilizing data from 2008 to 2016. The study employed the Autoregressive Distributed Lag (ARDL) technique, based
on the Bounds testing approach. The result of the study showed that financial innovation impacted positively on
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demand for money function in Kenya. Specifically, volume of ATM exerted positive and significant effect on
demand for money in Kenya
From the review, it is noticed that few studies exist in Nigeria examining the impact of financial innovation on
demand for money. These studies do not seem to use modern payment channels such as the Automated Teller
Machines (ATMs) transactions, Mobile banking transactions, Point of Sale (POS) transactions, and Internet banking
transactions in their analysis. This is the main focus of this study and departure from the previous studies in Nigeria
and the gap the study filled.
2.2. Theoretical Framework
This section reviews theories relating to the subject matter of investigation in this study. The relevant theories
reviewed included the financial innovation hypothesis, diffusion of innovation theory, the classical theory of money
demand, the Keynesian theory of money demand and the monetarist theory of money demand.
2.3. Financial Innovation Hypotheses
Financial innovation hypothesis was developed following empirical studies carried out by various authors like
Merton (1992), Allen and Gale (1994), and Grinblatt and Longstaff (2000). The financial innovation hypothesis
exists in two versions: financial innovation - growth hypothesis and financial innovation-fragility version. The main
proposition of the financial innovation hypotheses is derived from various theoretical literature and empirical
investigations carried out by authors to investigate the impact of financial innovation on economic growth.
According to the financial innovation - growth hypothesis, financial innovations plays a very important function in
the financial system by helping in the reduction of agency costs, facilitating sharing of risks in the financial system,
helping in improving the quality and variety of banking services, and ultimately enhances allocative efficiency in the
financial system (Allen and Gale, 1994; Berger, 2003; Grinblatt and Longstaff, 2000; Houston et al., 2010; Merton,
1992).
Deducing from this proposition, it means that financial innovation has ability of raising the efficiency of the
financial system by increasing the variety of financial products and services, which leads to improvement in
matching individual savers requirements with firms searching for funds (Chou, 2007). Also, within the theoretical
postulate of the financial innovation-growth hypothesis, it is posited that financial innovation do results in the
emergence of new financial technologies such as modern payment channels such as the Automated Teller Machines
(ATMs), the Mobile Banking, Point of Sale (POS) banking transactions, and Internet banking transactions, which
reduces transaction costs and promotes the productivity of capital.
On the other side of the argument, the financial innovation-fragility version considers financial innovation from
the sceptical view point or dark side. According to this version, financial innovation is the responsible factor causing
financial crises because the process of financial innovation does culminate in unprecedented increase in the creation
of credit, which makes for the initial boom and thereafter the burst (Brunnermeier, 2009). It is argued that financial
innovation provides financial institutions opportunity to design and create structured products capable of exploiting
investors‟ misunderstandings of the financial markets (Henderson and Pearson, 2011) . Furthermore, it is argued that
financial innovation driven by arbitrage regulation does not allow for efficient allocation of resources but rather
reinforces financial fragility which adversely affects effective implementation of monetary policy (Houston et al.,
2010).
2.4. Diffusion of Innovation Theory
The diffusion of innovation theory was first propounded by Rogers in 1962. This theory is an attempt to explain
the process through which new ideas and technology spread across the social system. According to the diffusion of
innovation theory, the process of technology adoption does not take place concurrently in a social system but that it
is a process whereby some people are disposed to the adoption of an innovation in advance of others.
From the innovation point of view, the diffusion of innovation theory has been applied to explain the adoption
of technology. Rogers (1995) argued that the process of technology diffusion comprises four aspects, namely an
innovation or new technology itself, the social system, the communication channels of the social system, and time
horizon. This process as advanced in the theory is dependent on the level of human capital development. Thus, the
higher the level of human capital, the faster the process of innovation transfer and adoption.
Since the formulation of the diffusion of innovation theory, it has been applied in numerous areas, including the
financial system. For instance, the revolution in information and communication technology has resulted to financial
innovation which led to the proliferation of new financial instruments, products and services, and new forms of
organization structure in the financial system. Financial innovation by way of new financial instruments such as
Automated Teller Machines (ATMs), internet banking, mobile banking, Point of Sales (POS) evolved as a result of
diffusion of innovation in the form of information and communication technology (ICT) into the financial system.
2.5. The Classical Theory of Money Demand
The classical theory of money demand is embedded in the quantity theory propounded by Irving Fisher in 1911.
Although, the classical economists did not explicitly propound the theory of money demand, but their views are
inherent in the quantity theory. In the classical theory, the demand for money is meant for transactions purposes as
money is demanded for payment for goods and services. In other words, people demand money solely for transaction
purpose and the more money people need for transactional purpose, the more money they will demand (Jhingan,
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260
2004). This relationship between money demand and the level of transaction is expressed in the equation of
exchange expressed as:
MV = PY…………………………………………………………………………………… (1)
Where:
M = the total quantity of money; V = velocity of money circulation; P = the general price level and T = total
amount of goods and services exchanged for money.
Equation (1) states that the quantity of money multiplied by the number of times money changes hands in a
given year must be equal to nominal income (the total nominal amount spent on goods and services in that year).
Fisher assumed velocity of money circulation to be reasonably constant in the short-run. His view of short-run
constant velocity transforms the equation of exchange into the quantity theory of money demand.
To show that the quantity theory of money is indeed a theory of money demand can be seen by dividing both
sides of the equation (1) by V to yield:
M = (1/V)PY…………………………………………………………………………………(2)
Since at equilibrium, the quantity of money (M) that people hold equal to the quantity of money demand (Md
).
Hence, M in equation (2) can be replaced by Md
using k to represent the quantity, (1/V), so that equation (2) can be
rewritten as:
Md
= KPY…………………………………………………………………………………….(3)
Since k is a constant, the level of transactions generated by a fixed level of nominal income PY determines the
quantity of money Md that people demand. In this regard, Fisher‟s quantity theory of money suggests a money
demand function is determined by income only, with interest rates having no effect.
2.6. Keynes’s Liquidity Preference Theory
The liquidity preference theory of money demand was propounded by Keynes (1936). In his famous book “The
General Theory of Employment, Interest and Money”, Keynes identified three motives people demand for money to
include: the transactional motive, the precautionary motive and the speculative motive. Keynes believed that the
demand for real money balances depends on both interest rate and income. According to Keynes, transactional and
precautionary motives are positively related with income. Moreover, Keynes argued that money demand for
speculative motive is negatively related to interest rate. From the three motivates of Keynes, a preliminary money
demand equation can be expressed as:
Md = Mt + Mp +Msp ……………………………………………………………………………………(4)
Where: Md is money demand, Mt is transaction demand for money, Mp is the precautionary demand for money
and Msp is the speculative demand for money. Keynes holds that transactions demand for money and precautionary
demand for money is the function of income, while money demanded for speculative purposes is a function of
interest rate. Hence, the Keynesian money demand function in an explicit form is expressed as:
Md/P = α0 + α1Y – α2i + ε………………………………………………………………………………(5)
Equation (5) states that money demand has positive relationship with income, but negative relationship with
interest rate.
2.7. Friedman Modern Theory of Money
Milton Friedman in 1956 developed a theory of the demand for money in a famous article, “The quantity Theory
of Money: A Restatement”. Fiedman‟s theory is considered to the modern quantity theory of money. The theory
states that a change in money supply will change the price level as long as the demand for money is stable. Such a
change according to the theory affects the real value of national and economic activity only in the short-run.
The modern theory indicates that the demand for money should be a function of the resources available to
individuals (their wealth) and the expected returns on other assets relative to the expected return on money.
Friedman in his empirical study on „„Monetary Trends in the United States and the United Kingdom (1982)‟‟
formulated the following demand for money function for an individual wealth holder with slightly different notations
from his original study of 1956 as:
M/P = f(Y, W, Rm, Rb, Re, gp, u)
……………………………………………………………………………………….(6)
Where: M = the total stock of money demanded; P = the price level; Y = the real income; W = the fraction of
wealth in non-human form, Rm = the expected nominal rate of returns on money, Rb = expected rate of returns on
bonds, including expected changes in their prices, Re = expected rate of returns on equities, including expected
changes in their prices, gp = (I/P) (dP/dt) = expected rate of change of prices of goods and hence expected nominal
rate of return on physical assets, and u = variables other than income that may affect the utility attached to the
services of money.
In Friedman‟s restatement the quantity theory of money, the supply of money is independent of the demand for
money. The supply of money is unstable due to the actions of monetary authorities. On the other hand, the demand
for money is stable.
3. Methodology
The model for this study is anchored on the eclectic approach based on the Keynesian theory of money demand
and the financial - innovation hypothesis. According to the Keynesian theory, demand for money is a positive
function of income and a negative function of interest rate. According to the financial innovation hypothesis,
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financial innovation usually results in the emergence of new financial products and services by way of emergence of
sophisticated payment channels such as Automated Teller Machines (ATMs), Point of Sales (POS), Internet
banking, and Mobile banking transactions. However, since the main focus of this study is to specifically examine the
impact of financial innovation on demand for money function, the traditional determinants of money demand such as
income and interest rate are dropped from the model to give way for the examination of the impact of financial
innovation on demand for money function.
The dependent variable is the demand for money, while the independent variables include modern financial
transaction channels such as the Automated Teller Machines, Mobile banking transactions, Point of Sale (POS) and
Internet banking transactions. Thus, the empirical model for this study can be formulated and expressed as:
MD =f(ATMVO, POSV, NETV, MOBV) ………………………………………………………(7)
Where:
MD = money demand, represented by broad money supply in Nigeria (in million naira)
ATMV = volume of Automated Teller Machines transactions (in millions)
POSV = volume of point of sales transactions (in millions)
NETV = volume of internet banking transactions (in millions)
MOBV = volume of mobile banking transactions (in millions)
The econometric log linear form of equation (7) can be expressed as follows:
LMD = 0 + 1LATMV + 2LPOSV + 3LNETV + 4LMOBV + U
……………………………………………………………8)
Where: 0 to 4 are the parameters to be estimated and U3 is the random error term.
The theoretical expectations concerning the signs of the parameters are as follows: 1<0, 2 < 0, 3<0, 4<0
3.1. Estimation Technique/Procedures
The study made use of ordinary least square (OLS) regression technique. The reason for employing the classical
Ordinary Least Squares (OLS) is that of all classes of estimators, the Ordinary Least Squares (OLS) is the Best
Linear Unbiased Estimator (BLUE) because it has minimum error. However, before the model was estimated,
several pre-estimation tests were carried out to ascertain the adequacy of the model. The unit root test was carried
out to determine the order of integration of the variables. The unit root test is conducted using the Augmented
Dickey-Fuller (ADF) test. The Augmented Dickey-Fuller (ADF) test equation can be expressed as:
∑ ……………………………………………………(9)
Where: is the difference of series ; and is the first difference of Yt-
1; α0, γ, and βi, are parameters to be estimated and Ut, is error term. We accept the null hypothesis of the presence of
unit root if γ = 0 and reject it if γ <0.
The cointegration test is carried out to determine if there exist long run relationship or not among the variables.
The Johansen and Juselius (1990) multivariate approach was employed, making use of the trace test and the
maximum eigenvalue test. The cointegration equation based on the vector autoregression specification can be
expressed as:
t
i
t
k
i
i
t
t C
y
y
y
1
1
1
……………………………………………………(10)
Where: ΔYt = n x 1 vector of the variables in period t; Γi = i = 1…k-1 is the n x n matrix of coefficient of the
short run specification; C = n x 1 vector of the constant term; Π = the n x n matrix of the long run impact; and εt = n
x 1 vector of error term. The null hypothesis is that H0: βi= 0 (there is no long run relationship among the variables)
and HA: βi ≠ 0 (there a long run relationship among the variables). To reach an acceptable conclusion for the
presence of cointegration, at least one cointegrating equation must be established otherwise there is no cointegration
among them. That is, if at least one computed test value is greater than the test critical value at the 5% level of
significance, then we can conclude that there is long run association among the variables.
Lastly, the error correction model is specified aimed at estimating the short run dynamics of the model. The
error correction model based on equation (7) can be expressed as:
∑ ∑ ∑ ∑ ∑
…………………………………………………………………………………………….(11)
Where: ECM is the error correction factor and U is the error term.
3.2. Data Sources and Description
Secondary source of data is used as the main method of data collection. The relevant data for this study were
obtained from the Central Bank of Nigeria (CBN) Annual Report and Statement of Account, Central Bank of Nigeria
(CBN) Statistical Bulletin. The study was based on time series data collected on quarterly basis from the period 2009
to 2019. Money demand is measured in millions of naira and was obtained from the Central Bank of Nigeria (CBN)
Statistical Bulletin (various years). volume of Automated Teller Machines transactions, volume of mobile banking
transactions, volume of internet banking transactions and volume of point of sales transactions are all measured in
absolute million, being that they are number of transactions in each of the payment channels. Data on them were also
obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin (various years).
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4. Analysis of Results
4.1. Descriptive Statistics
Table 1 presents descriptive statistics on the captured variables in this study. Data as presented in the table
showed that the mean values of money demand, volume of Automated Teller Machines transactions, volume of
mobile banking transactions, volume of internet banking transactions and volume of point of sales transactions were
₦17,980,699 million, 116,533,258 million, 14,056,366 million, 5,053,968 million and 23,069,857 million,
respectively. The maximum values of the variables were ₦29,137,800 million, 239,692,229 million, 159,423,943
million, 28,827,240 million, and 129,574,015 million for money demand, volume of Automated Teller Machines
transactions, volume of mobile banking transactions, volume of internet banking transactions and volume of point of
sales transactions, respectively. The minimum values of the variables were ₦8,997,817 million, 7,762,869 million,
110,400 million, 289,326 million, 118,620 million, respectively for money demand, volume of Automated Teller
Machines transactions, volume of mobile banking transactions, volume of internet banking transactions and volume
of point of sales transactions.
Examination of the data in the table showed that the distributions for all the variables were positively skewed,
given the positive values of skewness exhibited by the variables. However, examination of Kurtosis showed that the
distributions for volume of mobile banking transactions, volume of internet banking transactions and volume of
point of sales transactions were leptokurtic, while the distributions for money demand and volume of Automated
Teller Machines transactions were platykurtic.
Table-1. Descriptive statistics
MD ATMV MOBV NETV POSV
Mean 17980699 1.17E+08 14056366 5053968. 23069857
Median 17966538 1.02E+08 6587449. 1361402. 4870795.
Maximum 29137800 2.40E+08 1.59E+08 28827240 1.30E+08
Minimum 8997817. 7762869. 110400.0 289326.0 118620.0
Std. Dev. 5860870. 68414865 29502310 7761563. 36002755
Skewness 0.203271 0.236930 3.772866 1.980668 1.673927
Kurtosis 1.873787 1.948256 17.25064 5.851182 4.584059
Jarque-Bera 2.628326 2.439632 476.7011 43.67261 25.14851
Probability 0.268699 0.295285 0.000000 0.000000 0.000003
Sum 7.91E+08 5.13E+09 6.18E+08 2.22E+08 1.02E+09
Sum Sq. Dev. 1.48E+15 2.01E+17 3.74E+16 2.59E+15 5.57E+16
Observations 44 44 44 44 44
Source: Authors‟ computation, 2020
4.2. Unit Root Test
Given the times series nature of the data used, the study carried out the unit root test to ascertain the stationarity
properties of the variables. This was carried out to avoid estimating a spurious regression. The test was conducted
using the Augmented Dickey-Fuller (ADF) test. The test result is presented in table 2.
Table-2. Unit root test – Augmented Dickey-Fuller (ADF) test
Variable ADF Statistic Remarks
Level 5% Critical Value 1st Diff. 5% Critical Value
LMD -1.091688 -2.936942 -6.738966 -2.931404 I(1)
LATMV -1.472401 -2.931404 -6.441519 -2.933158 I(1)
LPOSV - 0.027050 -2.933158 -8.680675 -2.933158 I(1)
LNETV - 0.196231 -2.933158 -7.549894 -2.933158 I(1)
LMOBV -0.867801 -2.931404 -8.316712 -2.933158 I(1)
Source: Authors‟ computation, 2020
The result as depicted in the table using the Augmented Dickey-Fuller (ADF) test showed that no variable was
stationary at level since the computed ADF statistic values in absolute terms were less than the critical values at the
5% level of significance. Based on this result, the null hypothesis of absence of unit root cannot be rejected.
However, at the first difference of the variables, they were all found to be stationary. That means all other variables
plus inflation rate were stationary after their first difference, and hence were integrated of the first order.
4.3. Cointegration Test
The cointegration test was conducted to evaluate whether or not the variables have long run relationship. The
Johansen multivariate approach to cointegration was employed in carrying out the test. The cointegration analysis
made use of the trace test and the maximum eigenvalue test. The results of the test are presented in tables 3 and 4.
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Table-3. Trace test
Hypothesized Trace 0.05
No. of CE(s) Eigenvalue Statistic Critical Value Prob.**
None * 0.589613 110.4694 69.81889 0.0000
At most 1 * 0.550918 73.95259 47.85613 0.0000
At most 2 * 0.482809 41.13001 29.79707 0.0017
At most 3 0.254096 14.09691 15.49471 0.0803
At most 4 0.049406 2.077412 3.841466 0.1495
Trace test indicates 3 cointegrating eqn(s) at the 0.05 level
* denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values
Source: Authors‟ computation, 2020
Table-4. Maximum Eigen value test
Hypothesized Max-Eigen 0.05
No. of CE(s) Eigenvalue Statistic Critical Value Prob.**
None * 0.589613 36.51681 33.87687 0.0236
At most 1 * 0.550918 32.82258 27.58434 0.0097
At most 2 * 0.482809 27.03310 21.13162 0.0066
At most 3 0.254096 12.01949 14.26460 0.1099
At most 4 0.049406 2.077412 3.841466 0.1495
Max-eigenvalue test indicates 3 cointegrating eqn(s) at the 0.05 level
* denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values
Source: Author‟s computation, 2020
The result of the cointegration analysis using both the trace test and the maximum eigenvalue test revealed the
establishment of three cointegrating equations, respectively. This is so because both trace and maximum eigenvalue
statistics in each of the three cointegrating equations were greater than their respective critical values at the 5% level
of significance. Given these results, the study concluded that there is cointegration and hence existence of long-run
relationship among the variables.
4.4. Granger Causality Test
The result of the pairwise granger causality test for the causal relationship among the variables is depicted in
table 5.
Table-5. Granger causality test
Null Hypothesis: Obs F-
Statistic
Prob.
ATMV does not Granger Cause MD 42 0.68845 0.5087
MD does not Granger Cause ATMV 4.14863 0.0237
MOBV does not Granger Cause MD 42 1.63489 0.2087
MD does not Granger Cause MOBV 0.76901 0.4707
NETV does not Granger Cause MD 42 0.28030 0.7571
MD does not Granger Cause NETV 2.47879 0.0977
POSV does not Granger Cause MD 42 0.56646 0.5724
MD does not Granger Cause POSV 2.71315 0.0795
Source: Author‟s computation, 2020
Result of the granger causality analysis showed that there is unidirectional relationship running from money
demand to volume of Automated Teller Machines (ATMs) transactions. This means that money demand granger
caused volume of Automated Teller Machines. There was also unidirectional relationship running from money
demand to volume of internet banking transactions. Furthermore, there was unidirectional relationship running from
money demand to volume of point of sales (POS) transactions. This implies that money demand granger caused both
internet banking transactions and point of sales transactions. Lastly, there was causality relationship between money
demand and mobile banking transactions.
4.5. Over-Parameterized Result
The result of the over-parameterized model for the effect of financial innovation on demand for money in
Nigeria is depicted in table 6.
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Table-6. Over-parameterized result of the financial Innovation-Economic growth nexus
Dependent Variable: D(LMD)
Method: Least Squares
Variable Coefficien
t
Std. Error t-Statistic Prob.
C 3.914341 2.028988 1.929209 0.0651
D(LMD(-1)) 0.372441 0.212232 1.754878 0.0915
D(LMD(-2)) -0.134548 0.214357 -0.627685 0.5359
D(LATMV) 2.495889 1.841997 1.354991 0.1875
D(LATMV(-1)) -1.054053 1.595233 -0.660752 0.5148
D(LATMV(-2)) -1.158355 1.378522 -0.840288 0.4087
D(LMOBV) -0.107046 1.755776 -0.060968 0.9519
D(LMOBV(-1)) 1.520164 2.248106 0.676198 0.5051
D(LMOBV(-2)) 1.706214 0.902941 1.889618 0.0705
D(LNETV) 1.181581 0.682377 1.731567 0.0957
D(LNETV(-1)) 2.024885 0.991540 2.042161 0.0518
D(LNETV(-2)) 2.729512 10.46584 0.260802 0.7964
D(LPOSV) 1.486194 0.988628 1.503289 0.1453
D(LPOSV(-1)) -2.588648 1.581769 -1.636553 0.1143
D(LPOSV(-2)) 0.312014 12.57821 0.024806 0.9804
ECM(-1) -0.362398 0.162511 -2.229991 0.0350
R-squared 0.629192 Mean dependent var 479.9832
Adjusted R-squared 0.606708 S.D. dependent var 765.8990
S.E. of regression 664.7421 Akaike info criterion 16.12247
Sum squared resid 11047052 Schwarz criterion 16.79118
Log likelihood -314.5106 Hannan-Quinn criter. 16.36597
F-statistic 2.122919 Durbin-Watson stat 2.212552
Prob(F-statistic) 0.078904
Source: Authors‟ computation, 2020
The over-parameterized result as presented in table 6 showed that the error correction factor turned out with the
negative co-efficient and was statistically significant in consonance with theoretical expectation. Its co-efficient of
0.362 showed that approximately 36% of the disequilibrium in the financial innovation-demand for money equation
was corrected within a quarter. This is indeed a slow speed of adjustment from the disequilibrium in the short run to
the equilibrium in the long run.
The R-squared value of 0.629 and adjusted R-squared value of 0.606 showed that the estimated equation has a
good fit on the data. In particular, the adjusted R-squared of 0.606 indicated that about 61% of the total variation in
the dependent variable was explained by variations in the independent variables. The model therefore has a
moderately high explanatory power.
In the same vein, the F-statistic of 2.123 with its low probability value of 0.078904 showed that the overall
model was statistically significant at the 10% level of significance. This means that the independent variables have
joint impact on the dependent variable. Meanwhile, the Durbin-Watson statistic of 2.21 showed that there was no
problem of autocorrelation among the residuals in the model. This means that the model was well specified and well-
behaved.
4.6. Parsimonious Result
The parsimonious result was arrived by selecting the statistically significant variables and other variables of
interest and used in estimating the parsimonious result. The parsimonious result is presented in table 7.
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Table-7. Parsimonious result
Dependent Variable: D(LMD)
Method: Least Squares
Variable Coefficient Std. Error t-Statistic Prob.
C 2.360817 1.666585 1.416560 0.1663
D(LMD(-1)) 0.296237 0.174801 1.694712 0.0998
D(LATMV) 2.026825 1.550751 1.306996 0.2005
D(LMOBV(-2)) 1.122177 0.570748 1.966151 0.0580
D(LNETV) 9.723837 5.060283 1.921599 0.0636
D(LNETV(-1)) 1.820830 0.787468 2.312260 0.0274
D(LPOSV) 1.505931 0.568976 2.646739 0.0125
D(LPOSV(-1)) -1.902496 0.720258 -2.641409 0.0127
ECM(-1) -0.315648 0.116412 -2.711463 0.0107
R-squared 0.564393 Mean dependent var 479.9832
Adjusted R-squared 0.530492 S.D. dependent var 765.8990
S.E. of regression 626.6853 Akaike info criterion 15.90995
Sum squared resid 12567502 Schwarz criterion 16.28610
Log likelihood -317.1541 Hannan-Quinn criter. 16.04693
F-statistic 3.468168 Durbin-Watson stat 1.935260
Prob(F-statistic) 0.005481
Source: Authors‟ computation, 2020
The result as indicated in the table, the error correction variable has the expected negative coefficient and was
statistically significant in line with theoretical expectation. The ECM‟s coefficient of 0.315 showed that about 32%
of the disequilibrium in the system is eliminated within one quarter. This is a slow speed of adjustment from short
run disequilibrium to long run equilibrium. The adjusted R-squared of 0.530 showed that the estimated equation has
a good fit and moderately high explanatory power. Specifically, about 53% of the total variation in the dependent
variable was accounted for by the independent variables. The F-statistic of 3.468 with its low probability value of
0.005481 showed that the overall model is statistically significant at the conventional 1%, 5% and 10% levels of
significance. This means that the independent variables have joint impact on the dependent variable. Meanwhile, the
Durbin-Watson statistic of 1.935 showed that there is no problem of autocorrelation in the model.
Analysis of the short run coefficients showed that one period lagged of money demand has a positive
relationship with the current value of money demand in Nigeria in line with a priori expectation. This indicated that a
1% increase in the previous one period of money demand resulted in an increase in the current value of money
demand by approximately 0.30%, ceteris paribus. Statistically, the variable was statistically significant in its effect
on the current period‟s money demand at the 10% level of significance, given its low probability value of 0.0998.
The volume of Automated Teller Machine (ATM) transactions has a positive effect on money demand in
Nigeria. This shows that a 1% increase in the volume of ATM transactions resulted in an increase in money demand
by approximately 2.03%, ceteris paribus. The variable was however not statistically significant in influencing money
demand at any of the conventional 1%, 5% and 10% levels of significance, given its high probability value of
0.2005.
The result showed that the volume of mobile banking transactions has a positive relationship with money
demand in Nigeria. This result in real term shows that a 1% increase in two periods lagged volume of mobile
banking transactions led to an increase in money demand by approximately 1.12%, other factors held constant. The
variable was also statistically significant in influencing money demand at the 10% level of significance, given its low
probability value of 0.0580.
Furthermore, volume of internet transactions has a positive relationship with money demand in Nigeria. In real
term, the result showed that a 1% increase in the current and one period lagged volume of internet transaction led to
an increase in money demand by about 9.72% and 1.82%, respectively. The variables were also statistically
significant in influencing money demand in Nigeria. While current period‟s volume of internet transactions was
significant at the 10% level of significance, given its low probability value of 0.0636, one period lagged volume of
internet transactions was statistically significant at the 5% level of significance, given its low probability value of
0.0274.
Lastly, volume of point of sales (POS) transactions in the current period has a positive relationship with money
demand in Nigeria. This result in real term showed that a 1% increase in the current period‟s volume of point of sales
(POS) transactions resulted in an increase in money demand by approximately 1.51%. On the other hand, one period
lagged of volume of POS transactions has negative impact on money demand in Nigeria. This, in real term means
that a 1% increase in one period lagged of volume of POS transactions resulted in a decrease in money demand by
about 1.90%. The variables were also statistically significant in influencing money demand at the 5% level of
significance, given their low probability values of 0.0125 and 0.0127, respectively.
4.7. Stability Test
The study carried out analysis to test for the stability of money demand function during the period of analysis.
The aim was to ascertain whether or not the demand for money function was stable. The test was done using plot of
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266
cumulative sum of recursive residuals (CUSUM) and plot of cumulative sum of squares of recursive residuals
(CUSUMSQ). The results of the stability test are presented in figures 1 and 2. The plot of CUSUM and CUSUMSQ
statistics at 5% critical lines showed that they clearly wander in between the critical lines, indicating the stability of
the demand for money function in Nigeria.
Fig-1. Cumulative sum of recursive residuals (CUSUM) test
-16
-12
-8
-4
0
4
8
12
16
II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
2013 2014 2015 2016 2017 2018 2019
CUSUM 5% Significance
Fig-2. Cumulative sum of squares recursive residuals (CUSUM) test
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
2013 2014 2015 2016 2017 2018 2019
CUSUM of Squares 5% Significance
4.8. Diagnostic Test
To ascertain the adequacy of the estimated equation, several diagnostic tests were conducted. The results of the
tests are summarized in table 8. The Ramsey RESET test statistic of 1.117223 with its high probability value of
0.7348 showed that the estimated demand for money equation is stable in line with the CUSUM and the CUSUMSQ
test earlier performed. The Jarque-Bera test for the normality of the estimated equation is depicted in figure 3 and
table 8. The Jarque-Bera test value of 1.117214 with its probability value of 0.572005 confirmed the normality of the
estimated equation. Meanwhile, the Breusch-Godfrey serial LM test statistic of 0.098277 with its high probability
value of 0.9067 showed that there is no problem of autocorrelation in the model. This indicates that the residuals
terms are independent and hence there is no autocorrelation in the estimated equation. Lastly, the Breusch-Pagan-
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267
Godfrey Heteroscedasticity test value of 0.692790 with its high probability of 0.7441 showed that there is no
problem of heteroscedasticity and hence the disturbance terms are normally distributed. The conclusion from the
various test conducted showed that the estimated equation is adequate and well-behaved.
Table-8. Diagnostic test
Test statistic Value(prob.)
Ramsey RESET Test 0.117223
(0.7348)
Jarque-Bera test 1.117214
(0.572005)
Breusch-Godfrey Serial Correlation LM Test 0.098277
(0.9067)
Breusch-Pagan-Godfrey Heteroscedasticity Test 0.692790
(0.7441)
Note: values in parenthesis are probability values
Source: Author‟s computation, 2019
Fig-3. Histogram normality test
0
2
4
6
8
10
-0.08 -0.06 -0.04 -0.02 0.00 0.02 0.04 0.06 0.08
Series: Residuals
Sample 2010Q1 2019Q4
Observations 40
Mean -8.67e-19
Median -0.000261
Maximum 0.070245
Minimum -0.079448
Std. Dev. 0.028806
Skewness 0.062770
Kurtosis 3.809054
Jarque-Bera 1.117214
Probability 0.572005
Source: Author‟s computation, 2019
5. Conclusion and Recommendation
This study was carried out to investigate the impact of financial innovation on demand for money in Nigeria
using quarterly data for the period 2009 – 2019. Theoretical literature has established that financial innovation by
way of new financial products and services exert significant influence on the workings of the monetary policy and
hence money demand function. Based on this assertion, this study was carried out to investigate this claim for
Nigeria employing modern payment channels such as Automated Teller Machines (ATMs) transactions, Point of
Sales (POS) transactions, Internet banking transactions, and Mobile banking transactions.
The result obtained showed that financial innovation has mixed impact on money demand in Nigeria during the
period of analysis. For instance, financial innovation has positive impact on money demand through volume of ATM
transactions in the current period, two periods lagged of volume of mobile banking transactions, current period and
one period lagged of volume of internet banking transactions, and current period‟s volume of Point of Sales (POS)
transactions in Nigeria. On the other hand, financial innovation has negative impact on money demand through one
period lagged of volume of point of sales in Nigeria. On the stability of the demand for money function, the result of
the stability tests based on the CUSUM test and CUSUM of squares test showed that the demand for money function
was stable during the evaluation period.
Based on the result, the study recommended that monetary policy strategy of the central bank of Nigeria (CBN)
should be fine-tuned to ensure it is well suited to deal with the challenges posed by financial innovation by way of
proliferation of sophisticated payment channels. The central bank needs to be anticipatory through proper monitoring
of the financial landscape, by following developments closely and by trying to predict the consequences of financial
innovations and act quickly to counter any negative effect of financial innovation on the effectiveness of monetary
policy. Similarly, a policy of attracting more participants (non-government) and private sector funds to the money
market is necessary as this will deepen the market and make the market more dynamic and amenable to monetary
policy and counter any adverse effect of financial innovation.
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268
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