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Intellectual Capital and Organisational Performance of the Financial Sector: Evidence from Nigeria
Akintoye Ishola Rufus,
Adegbie Folajimi Festus,
Bello Isiaka Dada
Issue:
Volume 7, Issue 1, March 2022
Pages:
1-10
Received:
14 December 2021
Accepted:
4 January 2022
Published:
12 January 2022
Abstract: The world economy is moving to a knowledge-based economy from the industrial era. Prior studies have shown that reliance on physical and financial capital is not enough for sustained improved performance. Improved performance will continue to be of interest to management of organisations and to researchers and businesses should utilise strategic resources especially intangible ones (intellectual capital) to achieve competitive advantage. The study examined the effect of intellectual capital on organisational performance of financial companies quoted in Nigeria. The study adopted ex-post facto research design. The population was 53 financial companies listed on the Nigerian Stock Exchange (NSE) in 2019, from which 35 were purposively selected. The audited financial statements from 2010 to 2019 validated by the external auditors’ report were the data source. Descriptive and inferential statistics using regression analyses were employed. The Value-Added Intellectual Coefficient (VAIC) was used to measure intellectual capital (IC) and organizational performance had five measures of return of assets (ROA), return on equity (ROE), Leverage (Lev), Assets Turnover (ATO), and Market to Book Ratio (MB ratio). The study concluded that intellectual capital impacts positively on organizational performance, but firm size do not play a significant role. The study recommended that financial institutions should develop competencies by replacing the less-qualified performers, assist employees learn new management and technical skills through regular training and mentoring. Management should devise ways to improve employee’s competence in technical and information technology, in customer relation, suppliers’ management, projecting bank’s image, and a positive organizational culture to improve their intellectual capital stock.
Abstract: The world economy is moving to a knowledge-based economy from the industrial era. Prior studies have shown that reliance on physical and financial capital is not enough for sustained improved performance. Improved performance will continue to be of interest to management of organisations and to researchers and businesses should utilise strategic re...
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The Effect of Transaction Cost on the Performance of SMEs in Kenya
Abdikadir Noor Fidow,
Selefano Odoyo,
Francis Wambalaba
Issue:
Volume 7, Issue 1, March 2022
Pages:
11-19
Received:
26 January 2022
Accepted:
11 February 2022
Published:
9 March 2022
Abstract: The astronomical transaction costs due to incomplete information and lack of economies of scale for SMEs contributed the failure of large portion of SMEs in Kenya. Unlike large corporations, transaction cost is a big component of SME expenses due to asymmetry of information and borrowing small amounts of fund at a time. Although virtual lending institutions reduced transaction cost by directly connecting the lender and the borrower, the interest rate charged by these institutions is higher than the mean profit rate for SMEs. The study used regression analysis, ANOVA, and correlation coefficient and the result indicated that transaction cost explained 22.8% of variations in market value (R2=0.228), f(6, 205)=2.181, p< .05, ROA explained 18.0%, (R2=0.180), f(6, 204)=2.904, p< .05, while sales growth explained 14.7% (R2=0.147), f(6, 206)=1.471, p=> .05. It was found that transaction cost was significant in predicting market value and ROA, and null hypotheses were rejected. The correlation result showed that transaction cost was negatively and significantly correlated with SME performance r(210)=-0.363, p<0.05.
Abstract: The astronomical transaction costs due to incomplete information and lack of economies of scale for SMEs contributed the failure of large portion of SMEs in Kenya. Unlike large corporations, transaction cost is a big component of SME expenses due to asymmetry of information and borrowing small amounts of fund at a time. Although virtual lending ins...
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Assessing Business Failures in Ghana; Case Study of Selected Businesses
Issue:
Volume 7, Issue 1, March 2022
Pages:
20-26
Received:
6 February 2022
Accepted:
2 March 2022
Published:
9 March 2022
Abstract: Unemployment rate in Sub-Saharan Africa is on the ascendancy and the surest way to resolve this problem is by ensuring the sustenance of businesses. The success of businesses is, therefore, of paramount importance to a nation like Ghana; where many businesses fail by their fifth anniversary. Hence, it is of utmost importance to research into the failure of businesses in Ghana in order to safeguard jobs. The writer has, therefore, decided to conduct research into the causes of business failures in Ghana by interacting with some entrepreneurs whose businesses had collapsed, also by obtaining data on some businesses that suffered such fate. In this work, the researcher obtained primary and secondary data from selected businesses that collapsed in Ghana and analysed the causes of the collapse of these businesses. The research showed that the major reasons for the collapse of the selected businesses were; liquidity problems, lack of marketing strategies and lack of market research. Other important factors were diversion of funds and use of short term funds to finance long term (non-current) assets. He has also sought to suggest some remedies to that effect. Nonetheless, he has observed that few businesses that have applied best business practices have been outstanding in performance. The researcher, therefore, has commented on the performance of one of such businesses and advised others to emulate its way of doing business in order to be successful.
Abstract: Unemployment rate in Sub-Saharan Africa is on the ascendancy and the surest way to resolve this problem is by ensuring the sustenance of businesses. The success of businesses is, therefore, of paramount importance to a nation like Ghana; where many businesses fail by their fifth anniversary. Hence, it is of utmost importance to research into the fa...
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The Impact of Credit Risk on the Value of Shareholders of Listed Banks in Nigeria
Sani Abdul Rahman Bala,
Babangida Mohammed Auwal,
Muhammad Yunusa Salisu
Issue:
Volume 7, Issue 1, March 2022
Pages:
27-33
Received:
20 February 2022
Accepted:
16 March 2022
Published:
23 March 2022
Abstract: Credit risk is the weightiest menace that banks encountered during their operations. Various banking crises have prompted banks to focus more on credit risk management activities, as it is critical for banks to maximize the wealth of their shareholders. The primary goal of businesses is to maximize shareholder wealth, as such DMBs are expected to engage in risk management operations if and only if it adds value to both the firm and the shareholders. Thus, this study seeks to establish the influence of credit risks on the profitability of listed Nigerian DMBs. The ex-post facto method was adopted and the researchers sampled eight (8) out of twenty-four (24) quoted DMBs on the Nigerian Group Exchange. Data was sourced from the audited annual accounts of the sampled DMBs for a period of four years, spanning from 2015–2019. OLS regression techniques revealed that non-performing loans (NPL) have an insignificant influence on the profitability of the sampled DMBs (=-0.141; p, 0.797). This implies that a 1% increase in NPL would lead to a 14% decrease in shareholders’ value. Loan and advances (LAD) according to the regression models exert a significant influence on shareholders’ value (=7.341; p, 0.004). This implies that an increase in LAD will leads to an increase in the shareholders’ value. Nigerian banks should keep their loan and advance portfolios because it makes them more valuable to their shareholders.
Abstract: Credit risk is the weightiest menace that banks encountered during their operations. Various banking crises have prompted banks to focus more on credit risk management activities, as it is critical for banks to maximize the wealth of their shareholders. The primary goal of businesses is to maximize shareholder wealth, as such DMBs are expected to e...
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