Papers by David O Ugwunta
African Development Review, Jun 1, 2023
Research Journal of Finance and Accounting, 2012
This paper examines the relationship between excess value and excess profitability using deposit ... more This paper examines the relationship between excess value and excess profitability using deposit money banks in Nigeria as focal points of the study. The study relied on historic accounting data generated from financial (annual) reports and accounts of sampled banks between the ten-year period covered by the study. Borrowing from previous studies, appropriate regression and correlation equations were formulated to measure the relationship between excess value and excess profitability of Nigerian banks. The regression and correlation analyses revealed that the correlation is positive and significantly different from zero. This implies that there is significant relationship between excess value and excess profitability of deposit money banks in Nigeria. Thus the study provides evidence that there is a significant relationship between excess value and excess profitability of both diversified and standalone banks. Keywords: Diversification; excess value; excess profitability; stand alon...
This study examined the effect of bank credit to the private sector on economic growth in Nigeria... more This study examined the effect of bank credit to the private sector on economic growth in Nigeria using data on Gross Domestic Product (GDP) and bank credit to private sector (BCPS). Inflation and interest rates were included in the study as control variables. All data were obtained from Central Bank of Nigeria (CBN) statistical bulletin and span across 1981 to 2010. Data stationarity were ensured using the Augmented Dickey Fuller (ADF) statistic, while the OLS were applied to ascertain the impact of bank credit to the private sector on economic growth. Results of the analysis showed that bank credit to private sectors has a statistical strong positive relationship with GDP and that as expected, bank credit to the private sector has statistically significant effect on economic growth. The paper recommends that the CBN should lower its minimum rediscount rate to a moderate level that will enable banks fix low interest rates on their loanable funds while adopting direct credit control...
A B ST R A C T A profitable banking sector is better able to withstand negative shocks and contri... more A B ST R A C T A profitable banking sector is better able to withstand negative shocks and contribute to the stability of the financial system. The importance of bank profitability can be appraised at the micro and macro levels of the economy. At the micro level, profit is determined by bank’s management decisions and policy objectives, while the macroeconomic determinants look at variables that reflect the economic and legal environment where the credit institution operates. Bank profitability, typically measured by the return on assets (ROA) and/or the return on equity (ROE), and/or net interest margin (NIM) is usually expressed as a function of internal and external determinants. These issues engaged the minds of the authors in this paper. Industry related dataset that covers a 10year period of time was used. The regression results indicate that bank-specific characteristics and macroeconomic variables explain up to 97.4% variations in bank profitability when NIM was used as a de...
European Journal of Business and Management, 2012
This paper employed ratio analysis, and in particular the multi discriminant analysis model in pr... more This paper employed ratio analysis, and in particular the multi discriminant analysis model in predicting and detecting failing businesses in the manufacturing and other sectors of the Nigerian economy. Data were gathered for a five year period for eleven firms sampled from the manufacturing, oil marketing and the conglomerates sectors of the Nigerian economy. The result revealed that MDA is a veritable tool for assessing the financial health of firms in Nigeria. Accordingly MDA has high predictive power to deduce from a set of ratios the likelihood of failure or otherwise. It is remarkable to note that the MDA model not only predicts business failure but revealed most importantly that the warning signals of impending failure can be revealed one to two years before the actual failure. Keywords: Multi discriminant analysis; corporate failure; firm financial health; corporate bankruptcy predictor model.
Human fertility is a function of a variety of factors classified into proximate (direct) and dist... more Human fertility is a function of a variety of factors classified into proximate (direct) and distal (indirect) factors. A proper understanding of these factors is of paramount importance in tackling the problem of uncontrolled fertility, which commands enormous positive and negative consequences. This paper therefore isolated the determinants of population growth in Nigeria as caused by uncontrolled fertility, and ascertained the relationship between the population growth offshoot and economic growth in Nigeria. These were achieved by using data downloaded from the World Bank databank for a period of 51 years (1961-2011). Findings determined that high fertility and birth rate contributes positively to high population growth while further findings revealed that high population growth rate in Nigeria exerts negative consequences on the Nigeria’s economy. These negative consequences can be appreciated by high poverty, inadequate housing, poor sanitation, low standard of living, high unemployment rate and inflation, high pressures on existing infrastructural facilities etc.
Research Journal of Finance and Accounting, 2012
The multi discriminant analysis model (MDA) as proposed by Altman in 1968 was applied to a group ... more The multi discriminant analysis model (MDA) as proposed by Altman in 1968 was applied to a group of failed and healthy banks in Nigeria to ascertain if MDA is a veritable tool to predict business failure in the Nigerian banking industry. Data was gathered for a five year period for ten (three failed and seven healthy) sampled banks. The results show that MDA is a veritable tool for assessing the financial health of banks. As such, it has high predictive power to deduce from a set of these ratios the likelihood of failure or otherwise. The MDA not only predicts business failure but revealed most importantly that the warning signals of impending failure became manifested one to two years before the studied banks actually failed.
African Journal of Science, Technology, Innovation and Development, 2015
This paper investigates company-specific characteristics affecting oil and gas reserves disclosur... more This paper investigates company-specific characteristics affecting oil and gas reserves disclosure in the United Kingdom. Using a sample selected through purposive and stratified random sampling from 83 UK oil and gas exploration and production companies listed on the London Stock Exchange (LSE) the paper helped to shed light on this critical disclosure issue. The results provide evidence that company's characteristics of firm size, size of auditor, debt capital and listing status significantly affect the extent of disclosure of oil and gas reserves information, while stage of firm operation was not found significant. Furthermore, the need to reduce the agency cost of information asymmetry and moral hazard, and thus reduce contracting and monitoring cost, as well to signal prospects to stakeholders as determined by the firm size, use of debt capital, size of auditor, and listing status, will compel companies to disclose oil and gas reserves even where such disclosure is discretionary as is the case in the UK. The findings are relevant to analysts and investors who use oil and gas reserve data disclosed by companies in valuing firms. Of interest to them would be information on reserves quantity data and narratives provided in the website in contradistinction to the valuation based on the annual report alone.
Australian Accounting Review, 2016
The uncertainty surrounding oil and gas reserves estimation and the cost of gathering reserves da... more The uncertainty surrounding oil and gas reserves estimation and the cost of gathering reserves data discourage firms from disclosing sufficient data to satisfy SORP (statement of recommended practice) requirements, especially where oil and gas reserves disclosure is discretionary. However, the need to reduce agency cost and signal to stakeholders induces firms to disclose oil and gas reserves. The contrasting views on the rationale guiding the extent of disclosure were examined in this study. A sample was drawn from 83 United Kingdom (UK) oil and gas exploration and production companies listed on the London Stock Exchange. Appropriate statistical tools were used to investigate the extent of oil and gas reserves disclosure. The findings provide mixed results about the extent of disclosure to meet SORP's requirements. There was no particular evidence that UK oil and gas companies provide qualitatively acceptable oil and gas reserves quantity information. The observed varying degrees of disclosure in the market could be attributed to a discretionary regime that allows firms to determine how and when to disclose. Policy makers and industry regulators could find the results useful in assessing the current extent of disclosure compliance.
This study examined the effects of budgetary allocations on public sector reform agenda in Nigeri... more This study examined the effects of budgetary allocations on public sector reform agenda in Nigeria. In particular, allocations to the health sector were examined in order to determine whether they have positive impact on the life expectancy of the citizenry. The relevant literature to the study was reviewed to identify and fill the existing gap. The data were presented and analyzed using trend analysis to show the increases and decreases in data trend as well as interactions between variables. The findings revealed that the Federal Government budgetary allocations to the health sector have a positive but insignificant impact on life expectancy. Conclusion was drawn and it was recommended based on the findings of the study among others that the Federal Government should continue with the implementation of the public sector reform program but should strengthen the audit institutions to be able to carry out the responsibilities which the reform of public sector demands.
Nigeria undertook a major bank structure reform between 2004 and 2006. A pivotal plank of that re... more Nigeria undertook a major bank structure reform between 2004 and 2006. A pivotal plank of that reform was the pegging of government ownership in deposit money banks to 10%. This was informed by the general economic theory that state ownership in commercial undertakings hurts operating performance. This paper anayzes the implications of this reform on operating performance of banks in Nigeria. Results from descriptive statistics indicate that government ownership in Nigerian banks is about 4%; 6% > the limit prescribed by the Central Bank of Nigeria. The coefficient of government ownership is not only rightly signed but also statistically significant. With a coefficient of -0.0568, the results confirm theoretical conclusion that government ownership hurts operating performance. The results support the outcome of the Nigerian study of Thorsten B. et al (2003) who assessed the effect of privatization on bank performance in Nigeria over the period 1990-2001. The result further provid...
Introduction Organizations normally are carefully established and effectively managed to pursue a... more Introduction Organizations normally are carefully established and effectively managed to pursue and realize specific goals which usually constitute the corporate objectives of their owners (Guiltnan and Paul, 2002). Banking organisations play a major role in the economic development of a country. They are the major financial intermediaries between the sources and the uses of funds. In order to accomplish their missions, these entities continually seek to identify and service the needs and expectations of their clients, by providing them with mutual offerings at a consideration called profit. According to Adeyemi (2008), as the nature of bank businesses become more complex and wide, it becomes very imperative for all the banks to be connected with a modern means that would be simpler, faster, and more convenient to their businesses. This gave birth to the modern day banking system of using information technology. Banks are now getting connected with the information technology facilit...
Journal of Accounting and Taxation
This study examines the effect of audit quality on share prices of Nigerian oil and gas firms usi... more This study examines the effect of audit quality on share prices of Nigerian oil and gas firms using the regression and covariance analyses. Findings from the regression anlysis suggests that the composition of the audit committee and auditor type has significant effect on the market prices of quoted firms. There is a positive and significant relationship between audit committee composition and share prices. The covariance analysis suggests that while auditor type (BIG4/NONBIG4), auditor independence, and composition of the audit committee have a positive and significant relationship with market price of shares, tenure of external auditors has a negative relationship with the market price of shares. The implication of the findings is that audit quality will enhance reported earnings and hence the share market prices. The study recommends that firms should strive to associate with the BIG4 external auditors in Nigeria as such an association could enhance the credibility of the audit process and by extension their share prices; regulatory authorities should discourage joint audit and non-audit services to firms because it could threaten the independence of external auditors. Regulatory agencies should also present distinct statements on the tenure of the external auditors to be clearly stated in annual reports. This is because a long attachment between the external auditors and a client may threaten the independence of the external auditors.
International Journal of Financial Research
This paper determined the effect of the development of non-bank financial institutions on Nigeria... more This paper determined the effect of the development of non-bank financial institutions on Nigeria’s economic growth. Time series data, spanning a period of forty-one years, from 1970-2010 obtained from the Central Bank of Nigeria statistical bulletin were tested for stationarity. To measure the relationship and the impact of the explanatory variables on economic growth, the paper adopted a generic regression equation. Results suggest that total trade; investments of the insurance sector in financial asset; and insurance premiums have a high, positive and direct relationship with economic growth. Overall, our findings revealed that the focal variables insurance sector investment in financial assets; and insurance sector premiums significantly contribute to the economic growth of Nigeria.
International Journal of Financial Research
In this study the evidence over the existence and magnitude of the assumed negative relation betw... more In this study the evidence over the existence and magnitude of the assumed negative relation between accounting conservatism and firm performance in Nigeria was examined. Data from the annual financial statements of firms under the Consumer Goods sectoral classification on the Nigerian Stock exchange was used. The hypotheses were tested using the panel least squares while assuming the fixed effects. Opposed to the assumed negative relation, findings from the study suggest that accounting conservatism has a positive but non-significant effect on firm performance. This implies that firms in the Nigerian Consumer Goods sector do not practice accounting conservatism and hence produce low financial reporting quality. This is given the absence of accruals quality achieved when the reported information reported is credible and free of error and bias, intentional or otherwise. The study recommends that firms in Nigeria should be penalised if reported information are found to incomplete and ...
European Journal of Business and Management, 2012
Journal of Accounting and Taxation, Dec 31, 2012
Journal of Economics and Sustainable Development, 2012
This paper attempts to measure the market structure and competition in the consolidated Nigerian ... more This paper attempts to measure the market structure and competition in the consolidated Nigerian banking industry, as well as investigated the impact of the banking sector structure on bank performance. A time-series regression analysis was applied to a ten-year data period (2001-2010) to evaluate the relationship and the impact of banking sector structure, other explanatory variables on bank performance. Significant findings include that the Nigerian banking sector is oligopolistic in structure and that market concentration positively and significantly impacts on bank performance. These results suggest that market concentration is a major determinant of bank profitability in Nigeria. The structure of the Nigerian banking sector and thus the performance of banks may be improved if the sector is allowed to exploit the synergistic effect of market-induced consolidation.
This paper examines the internal factors that determine the profitability of the beer brewery fir... more This paper examines the internal factors that determine the profitability of the beer brewery firms in Nigeria. An OLS in the form of multiple regressions were applied to annual data generated from the annual statements and accounts of the sampled beer brewery firms covering a period of 2000 to 2011. The correlation and regression results identified the ratios of inventory to cost of goods sold; account receivables to sales; and sales and general administrative expenses to sales to have statistically significant impact on gross profit margin. The paper concludes that the above identified independent variables are the internal factors that determine the profitability of beer brewery firms in Nigeria.
European Journal of Business and Management, 2012
This paper investigates the impact of diversification on banks market value. Many studies have be... more This paper investigates the impact of diversification on banks market value. Many studies have been conducted on the effect of diversification on firm value. From a theoretical view point, it is commonly accepted that if the costs of diversification exceed its benefits, the market will discount the share price of diversified firms. The paper hypothesized that diversification does not impact significantly on market value of banks in Nigeria. Adopting an Expost facto research design and applying OLS, the regression results at 5% significant level of significance rejected the null hypothesis and thereby accepting the alternate. This suggests that corporate diversification impacts significantly on the market value of banks, implying that diversification in Nigerian banks impacts significantly on the market value of the diversified banks.
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Papers by David O Ugwunta