Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

For over a decade now, various efforts have been put in place by various governments of the developing economies to promote economic growth, financial development and expand trade with mixed results. The ability of financial development and/or trade openness to influence economic growth in the developing economies has been a subject of hot debate and remains inconclusive. While a number of scholars are of the view that compelling cointegration exists among each of these constructs, another set of substantial authors have documented that economic growth, trade openness and financial development do evolve independent of each other. Drawing from four financial developments–growth nexus theories, this study used the ARDL bound estimation techniques to examine the existence of cointegration among economic growth, financial development and trade openness in Nigeria. We intend to know what policy instruments need to be manipulated so as to achieve economic growth and financial stability. Our results show that a two-way cointegration exists between economic growth and financial development, on the one hand, as well as between economic growth and trade openness, on the other hand. We therefore recommend that in order to achieve economic growth, policy-makers should pursue strong financial development and increase trade openness

Can corporate governance mechanisms deter earnings management? Evidence from firms listed on the Nigerian Stock Exchange

The debate on the impact of corporate governance mechanism on earnings management remains inconclusive. The current paper explored the use of Two Stage Least Square (2SLS) estimation techniques to examine the relationship between the two constructs based on data sourced from listed companies on the floor of the Nigerian Stock Exchange between 2012 to 2016. We excluded financial industry data based on the peculiarity of the sector’s annual financial reporting system. Our results reveal that at best the relationship between corporate governance code and earnings management is mixed. In specific, it shows that governance code exerts negative influence on earnings management, while a positive relationship was observed to exist between earnings management and Insiders ownership. It was also noted that board independence and auditors’ independence has little or no effect on earnings management. The study therefore recommend that in order to curb earnings management practices, governance code of conduct for business entities should be strengthened and compliance should be enforced.El debate sobre el impacto del mecanismo de gobierno corporativo en la gestión de los ingresos sigue sin ser concluyente. En este artículo se hace uso de las técnicas de estimación de mínimos cuadrados de dos etapas para examinar la relación entre ambas variables a partir de datos de empresas cotizadas en la Bolsa de Valores de Nigeria entre 2012 y 2016. Se excluyen los datos de la industria financiera debido al peculiar el sistema anual de información financiera del sector. Los resultados obtenidos revelan que, en el mejor de los casos, la relación entre el código de gobierno corporativo y la administración de ingresos es mixta. En concreto, se muestra que el código de gobierno ejerce una influencia negativa en la gestión de las ganancias, mientras que se observa una relación positiva entre la gestión de las ganancias y la propiedad de los internos. También se observa que la independencia del Consejo y la independencia de los auditores tienen poco o ningún impacto en la gestión de las ganancias. Por tanto, este estudio recomienda que, para frenar las prácticas de gestión de ingresos, se fortalezca el código de conducta de gobierno de las entidades comerciales y se exija su cumplimiento