The Impact of Labour Turnover on Survival of Small and Medium Scale Enterprises: Evidence from Nigeria

Small and medium scale enterprises all over the world are now looked upon as the engine room of the economy. Governments especially in developing countries are becoming aware of the importance of this sector in the growth of their economies, hence attention are been given to this sector especially in the provision of funds, reduction of legal and bureaucratic bottlenecks involved in incorporation of small scale businesses, provision of manpower training to small scale business owner and other ancillary services that not only will enhance survival but assist in alleviating the level of poverty prevalent to the lower class and  the poor in their economies. It is against this background that this study empirically investigated the impact of labour turnover on survival of small and medium scale enterprises in Nigeria. Samples of fifty SMEs were used for the study and survival proxies such as profit after tax, age and size as dependent variables. The study adopted the two-variable regression models to test the study propositions. The results obtained indicate that labour turnover has positive and significant impact on age and size but was positive and non-significant on profitability of SMEs in Nigeria. The study therefore recommends that, business owners should ensure that workers are not turned over but should be retained. This will ensure their survival in business. Keywords: Labour Turnover, SMEs, Surviva

The Impact of Working Capital Management on Profitability of Nigerian Firms: A Preliminary Investigation

This study investigated the impact of working capital policies of Nigerian firms on profitability for the period, 2004-2008. Adopting the aggressive investment working capital policies and aggressive financing policies as independent variables and return on assets as dependent variable and controlling for size and leverage, the study revealed that aggressive investment working capital policies of Nigerian firms have a positive significant impact on profitability while aggressive financing policies have a positive non-significant impact on profitability. The findings from this study indicate that firms pursuing aggressive investment working capital policy will become risky in the long-run because as profitability increases; the firm grows and the amount of outsiders’ contributions also increases. The result also indicates that as the firm grows and outsiders’ contribution increases; the use of aggressive financing working capital policy decreases the profitability of the firm. Appropriate management of working capital is therefore essential if the firms are to achieve their objective of improved profitability and value creation for shareholders. Keywords: Working Capital Management, Profitability, Nigerian Firms

Financial Crises and Growth Prospects of African Economies

This work takes a cursory look at different aspects of African economies and their potentials for growth within the context of financial crisis. Financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value due to lot of factors. The history of financial crisis in the world could be traced back to sovereign defaults which were the form of crisis prior to the 18th century. However, the bursting of the South Sea Bubble and the Mississipi Bubble in 1720 is regarded as the first modern financial crises. Other crises have followed culminating in the recent global financial crisis which was as a result of the bursting of the housing bubble in the United States in August, 2007. The crisis caused a serious setback for Africa because it took place at a time when the region was making some progress in economic performance and management. Most, if not all the economies in Africa are faced with several problems: underdeveloped agricultural and manufacturing sectors, policy somersault, monoculture, inadequate infrastructures, corruption and the like, among others. This work suggests possible solutions (including alternatives to existing paradigms) on how African countries could navigate through various aspects of financial crisis. Keywords: Financial Crises, Growth Prospects, African Economie

The Impact of Interest Rate Liberalization on Savings and Investment: Evidence from Nigeria

The intellectual platform for financial liberalization in developing countries was provided by the seminar works of Mckinnon (1973) and Shaw (1973). They were of the view that interest rate liberalization causes interest rate to rise, thereby increasing savings and investment. This study took a careful look at the impact of interest rate liberalization on savings and investment in Nigeria. It covers the period 1976 to 1999. Simple linear regression technique was adopted using SPSS statistical software. The study reveals that interest rate liberalization had negative non significant impact on savings and negative significant impact on investment in Nigeria. Thus, interest rate liberalization, though a good policy, was counterproductive in Nigeria. This might probably be as a result of improper pace and sequencing. In determining the appropriate sequencing of interest rate liberalization, we recommend that the authorities need to distinguish not only between loan and deposit transactions but also between wholesale and retail transactions. Interest rates on wholesale transactions between sophisticated entities should be liberalized first, followed by lending rates and then deposit rates. This gradual approach safeguards the profitability of banks while allowing time for people and firms to adjust to liberalization. Keywords: Interest Rate Liberalization, Savings, Investment, Nigeri

Does Open Market Operations as a Monetary Policy tool have Impact on Price Stability in Nigeria?

Open market operation was introduced as a monetary policy tool in Nigeria in 1993. Since then, it has been extensively used in conjunction with other tools such as reserve requirement, discount window operation, and moral suasion as an instrument of price stability; however, inflation in Nigeria has not reduced to the desired single digit level on a consistent basis. It is against this background that, our paper investigated the impact of OMO as a tool for monetary policy on price stability in Nigeria from 1993-2007. Using OLS regression model, our result reveals that open market operation has positive non-significant impact on consumer price stability as proxied by inflation rate in Nigeria. Our result also reveals that there was a positive correlation between open market operation and consumer price stability of the Central Bank of Nigeria for the period, therefore remains a useful tool, hence our recommendation is that it should be used in conjunction with other relevant ones in the maintenance of price stability in Nigeria. Keywords: Open Market Operation, Price Stability, Nigeri

Impact of Recurrent and Capital Expenditure on Nigeria’s Economic Growth

The need to better the lots of citizens through government expenditure has raised questions on the impact of government expenditure on its impact on economic development and growth of nations. It is against this background that this paper examines the impact of government expenditure (disaggregated into recurrent and capital expenditure) on economic growth from 1987 to 2010. Three variable multiple regression model was adopted while recurrent expenditure and capital expenditure were used as independent variable and gross domestic product growth rate as dependent variable. The result emanating from this study reveals that while recurrent government expenditure had positive and non-significant impact on economic growth, capital expenditure had negative and non-significant impact on economic growth thus re-echoing the need for increase and encouragement of private sector investment while have proven over the years as a more efficient utilization of resources compared to public sector. Keywords: Recurrent Expenditure, Capital Expenditure, Economic Growth, Nigeri

Does the use of outsiders' fund enhance shareholders' wealth? Evidence from Nigeria

This paper is an attempt to extend the analysis of the links between the firm's financial structure and the objectives of the firm in maximizing shareholders' wealth. In theory, the financial goal of the firm should be shareholders' wealth maximization as reflected in the book value and the market value of the firm's share. However it is a challenge to management in our world of complex economic environments to achieve this objective. It is against this background that this paper empirically examined the impact of outsiders fund on the firms' shareholders wealth maximization objective using three value maximization indicators; net profit margin viz dividends per share and current ratio from 2004 to 2008 in the Nigerian economy. The study reveals that outsider fund has a positive though not significant impact on dividend per share and current ratio though it was negative and significant impact on net profit margin. Therefore, the study recommends the use of outsiders fund in the financial mix of firms as to magnify shareholders' wealth but an optimal level of outsiders' contribution should be sought for by management. This will reduce the possibility of trading on the equity of shareholders which may lead to bankruptcy of the firm

Stock Market and Economic Growth in Nigeria: Evidence from the Demand-Following Hypothesis

The capital market connects the financial sector with other non-financial sectors of the economy and, in the process, facilitates growth and economic development. Literature abound on the impact of stock market on economic growth however, little literature are available from the demand-following hypothesis which claims that it is the growth of the economy that causes increased demand for financial services which, in turn, leads to the development of financial markets. It is against this background that we examined the impact of stock market development on economic growth from the demand-following arguments from the period 1996-2010. Employing the Ordinary Least Square (OLS) regression, we found that economic growth has positive and non-significant impact on market capitalization ratio and turnover ratio of the Nigerian stock exchange but had a negative on the Nigerian stock market value traded ratio. Our study thus recommends an increased effort by the Nigerian government to grow the economy through rapid industrialization, provision of basic amenities such as electricity, roads, dams etc as this will in turn lead to the development of the financial sector.   Keywords: Stock Market. Economic Growth, Demand-Following Hypothesi

The Impact of Financial Deepening on Economic Growth: Evidence from Nigeria

This paper examined the impact of financial deepening on economic growth in Nigeria. Adopting the supply-leading hypothesis using variables such as broad money velocity, money stock diversification, economic volatility, market capitalization and market liquidity as proxies for financial deepening and gross domestic product growth rate for economic growth, we found that broad money velocity and market liquidity promote economic growth in Nigeria while money stock diversification, economic volatility and market capitalization did not within the period studied (1992-2008). Government policy should therefore be geared towards strategically increasing money supply and promoting efficient capital market that will enhance overall economic efficiency, create and expand liquidity, mobilize savings, enhance capital accumulation, transfer resources from traditional sectors to growth inducing sectors (such as manufacturing and industry, agriculture and the services sectors) and also promote competent entrepreneurial response in various sectors of the economy. Keywords: Financial Deepening, Economic Growth, Supply-leading Hypothesi

Enterprise Risk Management and Performance of Nigeria’s Brewery Industry

Given the complexity of today’s business world, the process of planning, organizing, leading and controlling the activities of an organization in order to minimize the effect of risk on an organizations’ performance is very important. This involves a risk management system which expands the process to include not just risk associated with accidental losses, but also financial, strategic operating and other risk. It is against this background that our paper examined the effect of enterprise risk management on performance of firms in the brewery industry in Nigeria. The study adopted the cross section survey design and copies of questionnaire were distributed to 375 respondent comprising top and middle level management staff of three major brewing firms in Nigeria. Using Z-test statistic, we found that enterprise Risk Management enhances the performance of firms in the Brewery industry in Nigeria. The study therefore recommends that managers in the brewery industry in Nigeria should continue to adopt and implement enterprise rise management as a tool to enhance organizational performance and this should be backed by policy. Keywords: ERM, Performance; Brewery Industry; Nigeri