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The Effects of Global Financial Crisis on Nigerian Economy
Abstract
The world economy is facing the most severe financial crisis since the Great Depression of the last century. The risk of global recession has heightened significantly and volatility of commodity prices, which is the mainstay of most developing countries like Nigeria, has increased further. If this situation continues to deteriorate, developing countries could be in great jeopardy. This study examined the influence of the Global Financial Crisis on Nigerian economy. It was discovered that the financial crisis will cause fall in commodity prices, decline in export, lower portfolio and FDI inflow, fall in equity market, decline in remittance from abroad etc. It was recommended that the federal government should come up with intervention policies that will minimize these effects and jump start the economy and that business operator should learn to do things using resources at their disposal to develop and expand at manageable level to stem the tide of the crisis.
... (Aderibigbe, 1999).The immediate impact of the financial crisis was caused by a host of factors such as; liberalization of global finance system, boom and bust in the housing market involving speculations in the real estate market as well as high risk loans, poor credit rating which has been minimal on African economies so far since most commercial banks in the region avoided investing in distressed assets from the United States and other parts of the world. (Adamu, 2009) However its effects where felt in terms of the African stock markets where trade volume fell substantially with that of the Nigerian stock market, in addition the downturn of the economies in the developed countries equally impacted on the economies of the developing countries through the indirect impact of unpredictable and decreasing commodity prices, particularly crude oil, on export revenue and capital inflow into the region, low remittance from abroad, reduction in foreign aid, and low foreign direct investment and portfolio investment (Adamu, 2009). Furthermore from reports, African countries like Tanzania downgraded its growth forecast down from 7.8% to 7.5% whilst AFDB forecast average growth of was downgraded to 5% down from 6.5% (Adamu, ©2022 | Published by Garden City Premier Business School, Port Harcourt-Nigeria 2009).Within the Nigerian Economy, regardless of the opinions and mindset of Financial Institutions such as the central bank in Nigeria, the impact of the crises was still visible in the Nigerian economy as flow of Foreign Direct Investment and Equity Investment dropped especially for important sectors such as agriculture, infrastructure development, health and education. ...
... (Aderibigbe, 1999).The immediate impact of the financial crisis was caused by a host of factors such as; liberalization of global finance system, boom and bust in the housing market involving speculations in the real estate market as well as high risk loans, poor credit rating which has been minimal on African economies so far since most commercial banks in the region avoided investing in distressed assets from the United States and other parts of the world. (Adamu, 2009) However its effects where felt in terms of the African stock markets where trade volume fell substantially with that of the Nigerian stock market, in addition the downturn of the economies in the developed countries equally impacted on the economies of the developing countries through the indirect impact of unpredictable and decreasing commodity prices, particularly crude oil, on export revenue and capital inflow into the region, low remittance from abroad, reduction in foreign aid, and low foreign direct investment and portfolio investment (Adamu, 2009). Furthermore from reports, African countries like Tanzania downgraded its growth forecast down from 7.8% to 7.5% whilst AFDB forecast average growth of was downgraded to 5% down from 6.5% (Adamu, ©2022 | Published by Garden City Premier Business School, Port Harcourt-Nigeria 2009).Within the Nigerian Economy, regardless of the opinions and mindset of Financial Institutions such as the central bank in Nigeria, the impact of the crises was still visible in the Nigerian economy as flow of Foreign Direct Investment and Equity Investment dropped especially for important sectors such as agriculture, infrastructure development, health and education. ...
... Stock market prices dropped significantly due to withdrawal of portfolio investments. Other impacts were the drop in Oil prices, remittances, provision of financial aid , drops in commercial lending, loss in financial assets by banks and other financial institutions, capital account liberalization, slowdown in economic growth, loss in Foreign reserve which ultimately affects the MDGs creating increased poverty, crime, etc. (Adamu, 2009) ...
The International financial system has witnessed major developments and has been impacted largely by series of financial crises over the past decades, from the 70s through the 90s and in the late 2000s, affecting both the developed, emerging and developing economies. Financial Integration, development of a single European currency, Capital flows and current account liberalization; regarded as fallouts of globalization and international trade are seen as major developments within the International Financial Systems. A comparison analysis of the financial developments between Europe and Africa is carried out in this paper, the impact of the financial System in Europe and Africa. It examines suggested reforms in the International Finance System and concludes with suggestions and proposals on the way forward for the International Financial System as forward by economists and scholars.
... In July 2007, global credit market came to a standstill due to the crisis in the United State of America's mortgage industry which manifested itself better in the year 2008. United State of America with an estimated GDP of $14 trillion contributes about 25% of world output and has the largest industrial complex, if it contracts by 1% this implies a direct output loss of approximately $14 billion which is equivalent to the GDP of Pakistan, the 47th largest economy in the world (Abdul, 2009). Sanda (2009) explains that the factor behind the global financial crisis was the slump in the United States mortgage industry. ...
... How can anyone think we are insulated or spared? International financial crises which affect trade and investment flows are bound to impact on the domestic economy (Abdul, 2009). Stock markets are sensitive to national and international events and react immediately. ...
... Their study found a negative significant impact on the Nigerian stock market by the global financial crisis. Using the survey method of research design and the ordinary least square (OLS) technique in their data analysis Abdul (2009) examined the effect of global financial crisis on Nigerian economy. The study discovered that the financial crisis caused fall in commodity prices and declined export, lower portfolios and FDI inflows and fall in equity market Yakubu and Akerele (2012) investigated the impact of global financial crisis on the Nigerian stock exchange that span the range of 2008-2011 using market capitalization to proxy the Nigerian stock exchange and capital inflow and foreign exchange rate to as global financial crisis. ...
The study examined impact of global financial crisis on the Nigerian stock market performance from 2008 to 2016. The study used three independent variables (foreign exchange rate, foreign direct investment on the Nigerian stock market and foreign reserves) and one dependent variable (stock market capitalization). Test carried out include unit root test and ordinary least square. The study revealed that: foreign exchange rate has no significant impact on the Nigerian stock market performance; foreign direct investments on stocks have positive but insignificant impact on the Nigerian stock market performance and foreign reserves have negative but insignificant impact on the Nigerian stock market performance. Based on the findings, the study recommends that, government and regulatory authorities should implement policies to improve the declining market capitalization by encouraging more foreign investors to participate and invest in the market. This is because capital inflow and market capitalization are positively related.
... Apart from the challenge of global economic recession, there is also the issue of growth rate of unemployment along all demographic lines. With global economic recession and the growing unemployment rate along all demographic lines, there is the question of what effect will the global economic recession have on human capital development in Nigeria, (Adamu, 2009). Scholars are also worried on whether there is any relationship between global economic recession and training & development of human capital in Nigeria. ...
... During economic downturns, however, migrant workers are often the most vulnerable category of workers, in terms of job losses and treatment in the workplace, and while some may well choose to return home, policies aimed solely at sending migrant workers home are not the solution and could have potentially disastrous consequences for development. (Adamu, 2009). ...
... Experts are of the opinion that the major challenges facing business organisations during recessions is how to develop critical human capital required taking them through the turbulent period. According to Adamu (2009), only business organisations that give premium to human capital development will be able to withstand the meltdown. ...
Global economies around the world have experienced the most traumatic moments in the last one-decade. The crisis has been described by scholars, as perhaps been the worst financial crisis since the great economic depression of the 1930s. This paper lucidly examines the effects of global economic recession on the development of human capital with reference to Nigeria nation. The objectives of the paper among others are (i) To establish the level of the impact of global economic recession on development of skills of human capital in Nigeria (ii) To examine if there is any significant relationship between global economic recession and the motivation of human capital development in Nigeria among others. The paper uses survey method with two research hypotheses. Questionnaires were administered among academic staff of two Nigerian universities in the southwest part of Nigeria. Findings showed that the global economic recession has great impact on the development of skills of human capital in Nigeria. Findings also revealed that there exists a positive relationship between global economic recession and training and development of human capital in Nigeria. The paper offers useful policy recommendations, which include the need for government and appropriate agencies to put in place policies such as enabling environment that will lead to the growth and development of human capital in Nigeria. Government needs to put forward policies that minimize cost at all levels, maximize efficiency of output, training and retraining of goods hands; and that there is need to encourage better motivation of workers at every sector of the economy amongst others.
... In July 2007, global credit market came to a stand still due to the crisis in US mortgage industry which manifested itself better in the year 2008. US with an estimated GDP of $14 trillion contributes about 25% of world output and has the largest industrial complex, if it contracts by 1% this implies a direct output loss of approximately $14 billion which is equivalent to the GDP of Pakistan, the 47 th largest economy in the world (Abdul, 2009). Sanda (2009) explains that the factor behind the global financial crisis was the slump in the US mortgage industry. ...
... How can anyone think we are insulated? International financial crises which affect trade and investment flows are bound to impact on the domestic economy (Abdul, 2009). Nigerian stock market has no doubt made remarkable progress in the past decade and this progress, in part can be attributed to the sound oversight functions and competent management of the market by the various regulatory authorities such as the Security and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE). ...
The objective of this study is to analyze the impact of the global financial crisis on the Nigerian Stock Exchange from 2008 to 2011. Market Capitalization is the proxy of the Nigerian Stock Exchange while Capital Inflow and Foreign Exchange Rate are the proxy of global financial crisis on Nigerian Stock Exchange. Using the ordinary least square it was found that the global financial crisis has no significant effect on the Nigerian Stock Exchange. This means policy of regulators had deepened the recession on the Nigerian Stock Exchange. The government is therefore advised to put up measures to stem up investors' confidence and activities in the market so that it could contribute significantly to the Nigerian economy.
... Whatever the reason, it hampers their success. Adamu (2009), stated that the inability of SME operators to keep records, negatively affects the growth of their businesses, or the ability to secure loans from financial institutions and determination of costs and profit. Furthermore, Adamu (2009) cited by Harris and Rowe as saying that: The explanation of the aversion of Nigerian enterprises to record-keeping and maintenance of accounts is related to the managerial capacity of the entrepreneurs. ...
... Adamu (2009), stated that the inability of SME operators to keep records, negatively affects the growth of their businesses, or the ability to secure loans from financial institutions and determination of costs and profit. Furthermore, Adamu (2009) cited by Harris and Rowe as saying that: The explanation of the aversion of Nigerian enterprises to record-keeping and maintenance of accounts is related to the managerial capacity of the entrepreneurs. The business unit may be unable to recruit the personnel who can keep the books or where it can obtain the service of such personnel, the entrepreneurs may not have the capacity to use the records and books of accounts. ...
The current global business climate change is becoming alarming as it is simply very different from that of the past; this is because Most SMEs in Nigeria liquidate within their first five years of existence; a smaller percentage goes into extinction between the sixth and tenth year while only about five to ten percent survive and grow to maturity. Thus, accounting is regarded as the language of business; as such acquisition of accounting skills should not be too academic but rather an integration of business needs into the teaching-learning processes to improve the gap between the necessary accounting skill needs of the industry (SMEs) and the higher institutions competencies using Ogun State as a pilot study. The sample size for the study was based on the Taro Yamane's 1967 formulae to select three hundred randomly and forty-four (344) registered SMEs and forty-eight (48) Senior lecturers and above across each of the Federal, State, and Private Universities in Ogun State, as the respondents for Accounting Educators. A self-designed 5-points Likert rating scale, close-ended Questionnaire was developed for the study and administered to respondents via Google Form software. The Pearson Product Moment Correlation Coefficient (PPMCC) technique alongside the t-test was used to analyze the gathered data with SPSS version 23.0. The result revealed that most SME owners stated that their accountants always provide Management Accounting Information (MAI). The study concluded that persistent increase in profit of the SMEs does not guarantee the sustainability of SMEs and that SME operators differ in opinion regarding the challenges encountered due to the lack of Management Accounting Information (MAI), which includes the challenge of profit maximization, enhancement of creativity and innovation, lack of technology management, and lack of accepting accounting students for SIWES/internship amongst others. In the same vein, firm policy (ies) should be initiated by appropriate government organs to owners of SMEs on the need to outsource their accounting responsibilities if they cannot afford to employ an accountant. These would promote the sustainable growth of SME activities and upgrade their operations more efficiently. Word count: 411
... Given the region's lack of public health infrastructure, government structure, permeable borders, and weak institutions, among other things, this appears paradoxical. It was stated that the low number of verified (COVID-19) cases in Asia and Africa was due to a lack of testing capability rather than geographic location [5][6][7][8][9][10][11][12]. ...
... The purpose of the study, according to [120,121], was to define the current stage of the pandemic in Palestine and to emphasize the significance of effective community health worker engagement in a (COVID-19) response. The researchers examined published papers on (COVID-19) as well as daily epidemiological data from the Palestinian Ministry of Health website from February 27 to May 3, 2020 (Epidemiology week [7][8][9][10][11][12][13][14]. We also looked at the ongoing reactions of the government and other important institutions. ...
This paper explored and examined the impact of the (COVID-19) pandemic for the following period from March 2020 to February 2022 on selected macroeconomic indicators and variables in Palestine, as well as its economic impact and structural factors that exacerbate the coronavirus (COVID-19) pandemic issue, are examined in this paper. This study uses data from the Palestine Monetary Authority (PMA) and the World Bank to assess the link between the exchange rate, crude oil price, inflation, and economic growth in Palestine using Johansen-Juselius multivariate cointegration techniques. The findings show that a combination of falling oil prices, high inflation, exchange rate, and spillovers from the (COVID-19) pandemic outbreak triggered the economic downturn in Palestine, which not only reduced demand for oil products but also halted economic activity when social distancing policies were implemented. The government responded to the situation by assisting companies and a limited number of homes afflicted by the coronavirus (COVID-19) pandemic. As a result, the report recommends that the government invest inadequate digital infrastructure to ease the shift from face-to-face business operations to "digital or online" business activities, which can assist the digital economy to expand.
... Ratha, Mohapatra, and Xu (2008) found that remittances are supposed to be remaining resilient in comparison with many other categories of resource flows to the developing countries. Adamu (2009) analyzed the influence of global financial crisis on Nigerian economy. He found that the financial crisis would fall into FDI inflow and decline remittances. ...
... Global financial crisis (D1GFC) had significant positive impact on remittance inwards of Bangladesh which is also another evidence of altruism motive of the workers for the families lived in home country during the economic uncertainty of the world in 2008-10. The finding supports (Jha et al., 2010;Ratha et al., 2008) but varies from Adamu (2009);Raihan (2012); Naude and Bezuidenhout (2014). ...
The purpose of the paper is to investigate the impacts of economic and non-economic factors on the remittance receiving of Bangladesh. The study focuses on quantitative analysis of unbalanced panel data of 8 countries on remittance receiving of Bangladesh for the period of 1981-2019 by employing fixed effects model and random effects model. The results show that crude oil price, domestic credit to private sector of host country, and global financial crisis of 2008-10 have significant positive impact on remittance receiving of Bangladesh. GDP per capita of home country has significant negative impact which is an evidence of altruistic motive of migrant workers to remit more money. The impact of terrorist attacks on September 11, 2001 is found significantly positive as it resulted into strict change in monetary regulation by spreading more money from informal channel to formal channel. The political unrest in Bangladesh during 2007-08 has insignificant positive impact what means the non-democratic and army backed 1/11 government did not help to grow the remittance receiving. Inflation rate of host country has insignificant positive impact and FDI to GDP of host country has insignificant negative impact.
... This led to the introduction of stricter lending requirements by banks and financial institutions (Soludo, 2009). As a result of the global financial crisis, many western banks reduced their financial investment in Nigeria in order to aid the parent organizations (Adamu, 2009), and international hedge funds and credit lines were withdrawn (Ashamu and Abiola, 2012). Also, 'banks with high foreign currency exposures were negatively affected, as they lost some financial assets deposited with foreign correspondent banks' (Adamu, 2009). ...
... As a result of the global financial crisis, many western banks reduced their financial investment in Nigeria in order to aid the parent organizations (Adamu, 2009), and international hedge funds and credit lines were withdrawn (Ashamu and Abiola, 2012). Also, 'banks with high foreign currency exposures were negatively affected, as they lost some financial assets deposited with foreign correspondent banks' (Adamu, 2009). According to Aluko (2008), 'financial institutions in economically advanced countries reduced their investments in the Nigerian financial system, thereby causing the collapse of the stock market. ...
The aim of this study is to examine the impact of the global financial crisis on the availability of bank credit to the Small and Medium Scale Enterprises (SME’s) sector of the Nigerian economy. In general terms, credit availability is a major catalyst to economic growth in any nation, and studies have shown that SME’s serve as the engine room for driving industrial development, wealth creation and financial independence. The effects of financial meltdown on SME’s is of great concern at this point in time. To achieve this aim, both secondary and primary data were used for the study. Chi square was used to analyze the primary data, while graph, percentages and the ordinary least square were used to analyze the secondary data. The findings of the study show that indeed the global financial crises negatively impacted the availability of credit to small and medium scale enterprises, thus worsening the credit rationing behavior of banks to the sector.
... In line with the research of Dash and Mallick (2010), another research is conducted by Adamu, (2010), he investigates the effect of global financial crisis on Nigeria economics condition. However, the research is more focused on qualitative analysis of several economics aspects such as Foreign Direct Investment (FDI) and stock investment, the trend of oil price decline, aid, and commercial loan. ...
... Capital flight also refers to the reduction of reserve fund due to devaluation issues, because the debit value on the balance of payments (reduction in assets) is the same with private capital outflow (Krugman and Obstfeld, 1999). Appleyard and Jr (1995) propose several reason for cross-country capital investment, A company will invest its capital across countries in response to the growing and expanding market. This hypothesis is supported by an empirical study that states if there is a positive relationship between the Gross Domestic Product (GDP) of beneficiary country and the quantity of incoming FDI. ...
p>The global economic crisis has become a nightmare for other countries when the crisis is originated from a multipower country. A financial crisis that hit European countries (Greece) in 2010 and the United States (US) in 2011 can be categorized as a financial crisis caused by a high state’s debt that leads to default. The response to the financial crisis is reflected in capital market players’ reactions, where other countries will respond to a particular endemic financial crisis. The objectives of this research are (1). Analyze the Impulse Response Function (IRF) of the Composite Stock Price Index of the US on Composite Stock Price Index in Indonesia, Malaysia, Singapore, Vietnam, Thailand, and Australia. (2). Analyze the Impulse Response Function (IRF) of the Composite Stock Price Index of Greece on the Composite Stock Price Index in Indonesia, Malaysia, Singapore, Vietnam, Thailand, and Australia. (3). Analyze the Forecasting Error Variance Decomposition (FEVD) of the Composite Stock Price Index of Indonesia on the Composite Stock Price Index of Malaysia, Singapore, Vietnam, Thailand, and Australia. The analysis will be conducted using VAR (Vector Autoregression). The result shows that all variables are responded to the financial crisis that happened in Greece and the US. This is reflected by the shocks created by the financial crisis in ASEAN-5 countries and Australia. On the other hand, the Composite Stock Price Index of Indonesia is also affected by Malaysia and Singapore.</p
... Nigerian economy depends largely on the oil industry, 85% of local revenues and 99% of foreign exchange are derived from export of crude oil (Adamu, 2009). Okoye et al. (2016) emphasized that the current fall in oil prices has caused serious problem for the Nigerian economy and presented a major risk for the construction industry, as it reduced budget revenues and restricted the government's abilities for infrastructure investments which indicates economic recession. ...
... The mainstay of Nigeria economy is the production and exportation of oil which account for a greater percentage of the revenue generated (Ogbonna, 2004). The dependence of the economy on the oil sector is very significant; 85% of local revenues and 99% of foreign exchange are derived from export of a single commodity (oil) (Adamu, 2009 Inflation can be described as a measure of general price increase of the price level in an economy. ...
In 2016, Nigeria’s real GDP growth rate in the first quarter was (-0.36%) while the second quarter was (-2.06%) and macroeconomic variables were relatively unstable indicating economic recession. This study was aimed at examining the influence of economic recession on building construction cost in Nigeria. Secondary data were obtained from Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and archival data on prices of building materials from building materials merchants. Primary data were obtained through questionnaire in which 71 questionnaires were distributed and 42 returned. Percentage, relative importance index, T – test, correlation and regression were employed for the analysis of data. The study found out that the major cause of economic recession is falling exchange rates with RII of 0.82 while the major effect of economic recession on the building construction industry in Nigeria is high rate of unemployment with RII of 0.84. It was also revealed that prime lending rate and prime exchange rate has changed significantly over the years. Economic recession and prices of building construction materials have strong influence on building construction cost in Nigeria. It was thus concluded that the Nigerian government has not develop proper strategies to tackle economic recession by introducing policies that will stabilize construction materials prices and macroeconomic variables. It was thus recommended that, government should invest in large scale public infrastructure projects that will create employment and Introduce policies that will stabilise macroeconomic variables and prices of building materials.
... Nigeria will not be able to achieve economic and political independence unless it has the courage to invest in and exploit other areas of the economy [3]. A few years ago, the falling global oil price led to a decline in foreign exchange profits, mass unemployment, rising prices, and possibly a recession in Nigeria [4,5]. To avoid these negative economic consequences, the Nigerian government has advocated economic diversification from an oil-based to a non-oil-based economy. ...
Nigeria possesses a multitude of solid mineral reserves strewn throughout its geographical space in incredible economic numbers, yet they remain mostly unexploited. One such solid mineral is kaolin. Nigeria has a resource of around three billion metric tons of kaolin deposits spread across the country. Kaolin’s distinct mineralogy and physical, morphological, and chemical properties make this raw material suitable for a wide range of applications. This paper reviews studies on kaolin (kaolinite) exploitation across Nigeria. The distribution of kaolinite clay deposits across Nigeria, together with their properties and applications, is discussed. It was observed that more than forty kaolin deposits have been located in the country. However, the application of kaolin for material development and production has been restricted to the laboratory and not in large-scale industries. Nigeria’s kaolin has been found to meet the requirements of industries such as paint, ceramic, rubber, paper, pharmaceutical, and cosmetics industries after beneficiation or calcination. Finally, the review highlighted some recommendations and future research directions that could also be useful in shaping the direction of futuristic research in this research area, such as discovering and harnessing untapped kaolin reserves in the country, development of new products, and the modification of already existing products, localization of industries, and collaborations between the government, industry, private sector, and academia.
... The economic crisis ravaging the global economy is naturally a serious challenge to educators and investors all over the world [8]. [1] says 'the world economy is facing severe financial crisis since the great depression of the last century'. The global economic crisis started in the United States late 2008 and has since become a major concern for political leaders around the globe as its impact has gone beyond the borders of the United States. ...
Corruption is one of the obstacles in the path of economic growth and social justice. It thrives when there is absence of public accountability and transparency in governance. Corruption is a manifestation of institutional weakness, poor ethical standards etc. Abnormal cash payment, abusing decision process or delegated powers in specific cases are indicators of corruption. The types of corrupt practices in Nigeria especially in education were discussed. Education is generally concerned with effecting our behavioral change that will synchronize with social norms for the sake of progress and survival. Mathematics as a subject that can be taught and learnt has so many qualities which serve as a weapon to minimize/eradicate corrupt practices. Branches of Mathematics such as Algebra, Statistics and Probability when properly taught and learnt will help in developing habits of effective critical thinking. The research work therefore examined the role of Mathematics education in developing the capacity of the children, youths and adults at all levels of education to distinguish between right and wrong. Conclusively, there can be no economic growth and social justice without mathematics education in Nigeria.
... It was then recommended that, for the capital market to realizes its full potentials, its environment must be enabled to promote and encourage investment opportunities for both local and international investors, since the stock market operates in a macroeconomic environment. Adamu (2008) examined the impact of capital market on the Nigeria economy and also examined how stock exchange market has contributed to the economic growth which aims at studying the second tier securities market. The secondary data employed in the work were collected from the statistical bulletin of the Central Bank of Nigeria (CBN) 2008. ...
This study examines the roles of capital market in the development of the Nigerian economy. Economic growth is the amount or value of goods and services produced by a nation over a period using GDP to gauge it. Capital market is characterised by market capitalization, volume of transaction and listed equities. Data was collected using secondary source of data only. The technique employed was multiple regressions as tool of analysis for the study. The findings of the study show that market capitalization (MCAP) and Total Listed Equity (TLE) has a positive effect on the Nigeria GDP as a result of their coefficients value which is 61.74622 and 1226.677 respectively. While volume of transaction (VOT)" has a negative effect on GDP as a result of the coefficients value of-0.206736. This implies that capital market performance has positively and significantly impacted on the Nigerian economy. The study therefore, recommend among others that the central bank of Nigeria (CBN), the Nigerian stock exchange (NSE) and security and exchange commission (SEC) should ensure free flow of information in the market. This is essential in order to draw more investors and increase the issues which will repeatedly increase the total amount of the market capitalization that will result in improving the performance of the Nigerian capital market.
... According to [15] investigated the impact of the global financial crisis on the Nigerian economy and discovered that the crisis has resulted in a significant drop in the prices of goods and services, a decrease in exports, a decrease in the portfolio and foreign direct investment inflows, a decrease in the equity market, and a decrease in remittances. Based on a comparative analysis of the US economy. ...
This research looked at the overall impact of the global financial crisis on the Palestinian economy from 2005 to 2021, focusing on two periods: the first from the start of the global crisis in the fall of 2008 to December of that year, and the second from December of that year to the end of that year 2011. The findings of this study show that Palestine's strong reliance on the prices of foodstuffs, oil, olive oil, fruits, vegetables, and food items as a whole has resulted in a rise in the prices of oil and gas, commodities, and foodstuffs as a result of the worldwide crisis. We also discovered that the banking and tourist industries were unaffected by the downturn. The information is given in a series of tables with statistical analysis to back it up. This research backs up this theory with solid empirical data. In terms of Palestinian economic growth, it should be highlighted that for the past two decades, the Palestinian National Authority has relied on foreign donations and grants to fund its expenditures. This revenue source has recently dwindled, resulting in the suspension of public worker salary payments as well as a reduction in overall government spending. Large and persistent trade deficits, on the other hand, continue to push the government and the private sector into unsustainable debt. Because there is no national currency in Palestine, both the governmental and commercial sectors rely on foreign reserves. Although the Palestinian National Authority (PNA) and the Palestinian Monetary Authority (PMA) have so far avoided a systemic currency crisis, existing Original Research Article Badwan; AJEBA, 22(7): 85-106, 2022; Article no. AJEBA.85075 86 deficit financing patterns are unlikely to last permanently, since domestic foreign reserves are fast diminishing and arrears mount. The amount of debt owed is increasing at an alarming rate. This leaves the administration with two alternatives for funding the deficit: either selling debt instruments on the capital markets or using the Palestinian Monetary Authority to introduce Palestinian currency to cover expenditures. Capital market financing without monetary authority, according to the study, leads to large interest rate volatility and financial instability. Given terms of monetary finance, in the existing institutional and economic framework, there are no criteria for creating a national currency.
... Critics believe that the crisis was fuelled by the US government mortgage policies which encouraged trends towards issuing risky loans. A very good example, for instance, Fannie Mae Corporation eased credit requirements on loans and these encouraged banks to extend home mortgages to people who did not have good credit rating (Adamu, 2009). According to Dimmadu (2015, p.58, 59), "The market crisis was triggered off by an unwholesome marker delusion and an interim economic bubble which was sustained by an apparent optical illusion of market participants to the effect that they believed that the bubble or temporary market induced boom would remain indefinitely". ...
This study investigates the implications of the global economic crisis on the Nigeria economy with the view to determine the policy options available for the Muhammadu Buhari regime. To undertake the study, literature was drawn primarily from extant works. The findings reveal that the current economic crisis in Nigeria which resulted to the decline in government revenue, huge debt burden, depreciation of the Naira and high cost of living were as a result several years of overdependence on the oil and gas sectors at the expense of other sources of revenue for government. The study observes that Nigeria failed to learn from the experiences of other countries such as the Latin American States that surmounted similar economic challenges, which smacks of countries that think their economies are not linked to other economies. The study recommends flexibility of foreign exchange rate, diversification of the economy, alternative dispute resolution mechanism in the Niger Delta as oppose to the "show of force" and sustained war against corruption as the pathways to overcoming the economic crisis confronting the country today.
... It was further enumerated that the causes of the crisis also includes breakdown in underwriting standards for subprime mortgages, flaws in credit rating agencies assessments of subprime Residential Mortgage Backed Securities (RMBS) and other complex credit products especially Collaterized Debt Obligations (CDOs) and other Asset-Backed Securities (ABS), risk management weaknesses at some large US and European financial institutions; and weak regulations such as disclosure requirements that failed to mitigate risk management weaknesses. Adamu (2009) summarized the causes of the crisis as liberalization of global financial regulation, boom and bust of the housing market, speculations, new financial structural design, poor credit rating, high risk loans and government policies. In the words of Sanusi (2011), most scholars have argued that the crisis was not without warning, the housing boom witnessed in the United States and lack of coherent regulation highlighted the flaws in the system. ...
The financial system in any economy plays the important role of promoting economic growth and development through the process of financial intermediation. However, this system was recently hit by a global financial crisis that emerged from the U.S.A in 2007. This study empirically examined the impact of global financial crisis on Nigeria's financial sector using time series data that spanned from 1970 to 2010 and applied the econometric methodology of Autoregressive-Error Correction Model (AR-ECM). The results indicate a long run relationship between banks asset, Money Supply and the dummy variable used to capture global financial crisis. The results also show that global financial crisis significantly affected the banking sector negatively. The study therefore recommends that the Nigerian government should strengthen the growth of institutions like the pension fund, Housing fund, and Health insurance fund in order to enhance the liquidity of the financial system. Formulation and implementation of more vigilant regulatory measures should be adopted for the financial system in Nigeria. There should be proper coordination among regulators; while the CBN is urged to continue with and strengthen the banking system consolidation programme as well as the cashless policy.
... It was further enumerated that the causes of the crisis also includes breakdown in underwriting standards for subprime mortgages, flaws in credit rating agencies assessments of subprime Residential Mortgage Backed Securities (RMBS) and other complex credit products especially Collaterized Debt Obligations (CDOs) and other Asset-Backed Securities (ABS), risk management weaknesses at some large US and European financial institutions; and weak regulations such as disclosure requirements that failed to mitigate risk management weaknesses. Adamu (2009) summarized the causes of the crisis as liberalization of global financial regulation, boom and bust of the housing market, speculations, new financial structural design, poor credit rating, high risk loans and government policies. In the words of Sanusi (2011), most scholars have argued that the crisis was not without warning, the housing boom witnessed in the United States and lack of coherent regulation highlighted the flaws in the system. ...
The financial system in any economy plays the important role of promoting economic growth and development through the process of financial intermediation. However, this system was recently hit by a global financial crisis that emerged from the U.S.A in 2007. This study empirically examined the impact of global financial crisis on Nigeria's financial sector using time series data that spanned from 1970 to 2010 and applied the econometric methodology of Autoregressive-Error Correction Model (AR-ECM). The results indicate a long run relationship between banks asset, Money Supply and the dummy variable used to capture global financial crisis. The results also show that global financial crisis significantly affected the banking sector negatively. The study therefore recommends that the Nigerian government should strengthen the growth of institutions like the pension fund, Housing fund, and Health insurance fund in order to enhance the liquidity of the financial system. Formulation and implementation of more vigilant regulatory measures should be adopted for the financial system in Nigeria. There should be proper coordination among regulators; while the CBN is urged to continue with and strengthen the banking system consolidation programme as well as the cashless policy.
... In fact, most studies concentrate on the causes and impact of financial crisis rather than what it entails. However, the term financial crisis may be applied to a gamut of situations in which a large part of the value of financial institutions or their assets is suddenly lost as a result of economic and currency crisis and stock market crashes (Adamu, 2009 would not devalue the baht was the spark that ignited the crisis. Consequently, the currency lost more than 20% of its value against the dollar in less than two months (Oluba & Uwaleke, 2009). ...
The gains of the Nigerian banking sector capitalization that climaxed in 2005 can no longer be guaranteed because the Nigerian stock market meltdown that started towards the end of the first quarter of 2008 has severely affected the capitalization of the banking sector through the erosion of their market value. The study ascertained the impact of the stock market meltdown on the profitability of listed DMBs in Nigeria. The study relied heavily on secondary data collected through the NSE factbook and the annual reports of sample DMBs. The simple regression analysis revealed that the profit after tax of DMBs is not significantly influenced by the Nigerian stock market meltdown. Consequently, it was recommended that banking regulation in Nigeria should be operated in a global and liberalized financial system.
... Long-term movements in global oil prices considerably and negatively affect export flows in Iran, Japan, and Korea, but created no effect on the countries under consideration. Adamu (2009) also estimated the impact of the recent international crisis on the Nigerian economy. Given the integration of the Nigerian economy with that of the USA and the UK, such crisis causes a decline in the prices of goods, mainly crude oil, exports, FDI inflow, and a fall in the equity market. ...
This study investigates the effect of financial crises on macroeconomic variables that include gross domestic product (GDP), export, inflation, and exchange rates, in some developing countries, namely Iraq, Iran, and Turkey, from 1980 to 2017. In doing so, it performed unit root and cointegration tests and employed generalized least square and panel dynamic least squares estimating methods. Findings/Originality: The empirical results show that the financial crises affect GDP, export, inflation, and exchange rates of the countries at different levels. While the Asian financial crisis shows a significant negative effect on GDP in Iran and Iraq, the global financial crisis exhibits a negative influence on export in all countries. Nevertheless, both Asian and global crises positively affect inflation because financial crises reduce expenditure at the family and government levels. Thus, governments worldwide attempt to minimize the inflation rate.
... In the words of the Central Bank Governor of Nigeria (CBN), the global financial meltdown led to the crumbling of many businesses including otherwise formidable corporate giants across the world (Soludo, 2008). In Nigeria, the Foreign Direct Investment (FDI) declined following the market shocks and the weakening confidence in investors (Adamu, 2008;Aluko, 2008). The cement industry was not spared in this as the world giant; Lafarge shrank its investment in the sector. ...
The Article is about foreign exchange market intervention in an Emerging economy-Evidence form the ASEAN-5 Foreign exchange markets
... Researcher [2] defines economic meltdown as economic "go slow" that stagnate the growth of the economy. Author [14] defines economic meltdown as a dangerous accident affecting the trade, industry, and development of wealth and the management of country money. ...
The global economic meltdown is a situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis. This global recession was caused by so many factors, thus, inflation rate, exchange rate, interest rate, unemployment rate, etc. This paper examined the impact of the global economic meltdown on property development in Bauchi, Nigeria. Data for the study are mainly primary in the form of questionnaires administered. The study had property development as an endogenous variable while a high-interest rate and unemployment rate as exogenous variables to measure the constructs. Multiple Regression were used to analyze the data. Among the study, findings are that high relationship exists between the two predictor variables (High-Interest Rate & Unemployment Rate) and dependent variable (property Development) where ‘R’ of 0.724 means the correlation is about 72 %; with R2 of 0.052 indicate that 5.2 % correlation, the analysis also depict in coefficient table that high-interest rate has more influence on dependent variable (PD) than unemployment rate. The analysis signified that the impact of the global economic meltdown has a positive effect on the dependent variable. Based on the findings, the study recommended governments and financial institutions intervention to curb the impediment of property development in Bauchi, Nigeria.
... Besides the receding economic problem, there is an extended rate of joblessness along demographic lines. With the worldwide financial crisis and the increasing rate of unemployment along demographic lines, there's a challenge of what impact will the world economic downturn have on learning and development (Adamu, 2009) and (Ogbari, et al, 2017). ...
Learning and development outcomes in organizations have been of contention in most technology based entrepreneurial firms in recessive economies like Nigeria and the inability to appropriate finance for learning and development priorities tend to inhibit the growth of human capital in the nation's economy at large. The research analyzed the effect of operation budget on learning effectiveness during recession and evaluated the effect static budget on competitive advantage during recession. The findings showed that operation budget have significant effect on learning effectiveness (at P =0.004). It was also found that static budget does not have any significant relationship with competitive advantage (at P= 0.084). The research concludes that economic meltdown has not too many effects on learning and development outcomes of human capital as organizations still gets value for trainings on employee with reference to productivity in Nigeria. The study further recommends that entrepreneurial firms should create enabling operating environment for employees through right learning and development policies to avoid degradation of human capital.
... Similarly, some authors go further to assert that financial development does not only speed-up economic growth but also helps in generating more employment, thereby reduces the spate of wide spread poverty and inequality, 2008 ;Adamu, 2009;Baily and Elliott, 2009;Cecchetti, Kohler and Upper, 2009;Goldstein and Xie, 2009;ILO, 2010;Raz, Indra, Artikasih and Citra 2012;OECD, 2013;Shabbir and Rehman, 2016). Specifically, during the GFC, financial market harms employment through credit constraints (Dromel, Kolakez and Lehmann, 2010;Jermann and Quadrini, 2012;Schularick and Taylor, 2012). ...
The goal of every government is to provide decent employment for its citizenries. This goal has, however, become unattainable in many countries, particularly in developing countries, including Nigeria. As a result, several empirical studies have been conducted with the goal to find macroeconomic variables that are positively (negatively) correlated with the employment (unemployment) so that government can direct its policy arsenals towards that direction. However, few empirical investigations have been conducted on how financial development relates to unemployment in the short-run and the long-run, taking into consideration different measures of financial development. This is the aim of this study. Using various financial development indicators and employing ARDL as a method of estimation, it was found that only financial system deposit to GDP has a potential to reduce the unemployment rate in the short-run and the long-run. Other financial indicators such as credit to private sector, financial liquidity, financial efficiency and financial stability only reduce the unemployment rate in the short-run. We also found that financial development and unemployment rate (including inflation rate and real GDP) are cointegrated. The results we attributed to the level of financial sector development in Nigeria compared with the level of financial sector development in Emerging and Developed Countries. Based on this, it is important for the authority to further strengthen and deepen the financial sector through proper supervisions and regulations, as well as formulation and implementation of appropriate policies so that the sector can perform its intermediary role effectively and efficiently in the economy.
... The global financial crisis, which elicited by the credit crunch within the US sub-prime mortgage market has however left its impact on the Nigerian oil sector, the rationale behind this is revenue from oil is used by the country to finance its budget and the countries that are mostly hit by the crisis are the primary market for the country's oil (Adamu, 2009). Nigerian stock market (NSM) has proven to be one of the most efficient in terms of profitability as it posted one of the highest annual returns in 2007. ...
... As long as financial commitment is maintained, this can have a positive impact on a country's economy in the short term. However, assessments of long-term economic impacts are mixed(Bonn, 2013;Hailu & Shiferaw, 2016;Mustafa et al., 2015), and donor and investor withdrawal can have devastating impacts in the long-term, as cost-intensive construction and maintenance of infrastructure cannot be guaranteed(Adamu, 2011; Carro & Larrú, 2010;Majerová, 2012). The Financial Dependence Metric (FDM; virtually a "financial footprint") is calculated as:where FDI, ODA and GNI are in [US$ capita -1 ].Data for ODA and GNI are for 2015 or most recent available data, FDI are averaged over the period 2011-2015. ...
Cities are the drivers of socio-economic innovation, and are also forced to address the accelerating risk of failure in providing essential services such as water supply today and in the future. Here, we investigate the resilience of urban water supply security, which is defined in terms of the services that citizens receive. The resilience of services is determined by the availability and robustness of critical system elements, or “capitals” (water resources, infrastructure, finances, management efficacy and community adaptation). We translate quantitative information about this portfolio of capitals from seven contrasting cities on four continents into parameters of a coupled systems dynamics model. Water services are disrupted by recurring stochastic shocks, and we simulate the dynamics of impact and recovery cycles. Resilience emerges under various constraints, expressed in terms of each city’s capital portfolio. Systematic assessment of the parameter space produces the urban water resilience landscape, and we determine the position of each city along a continuous gradient from water insecure and non-resilient to secure and resilient systems. In several cities stochastic disturbance regimes challenge steady-state conditions and drive system collapse. While water insecure and non-resilient cities risk being pushed into a poverty trap, cities which have developed excess capitals risk being trapped in rigidity and crossing a tipping point from high to low services and collapse. Where public services are insufficient, community adaptation improves water security and resilience to varying degrees. Our results highlight the need for resilience thinking in the governance of urban water systems under global change pressures.
... And that all stress-strain-health relationships have impact on the affected organization(s). Occupational stress is becoming increasingly globalized and cuts across boundaries of nations, professions including categories of workers, their families and societies in general(Ahmad and Ahmad, 1992, Sverke et al., 2002;Morris and Maisto 2005). ...
... The Role of Corporate Social Responsibility … 93 financial crisis showed its effects in 2008 and the crisis started at the same time both in Europe and in the USA (Adamu, 2009). ...
The concept of ‘social responsibility’ can be explored from three dimensions, namely individual, corporate and global. Academic discussions about social responsibility are predominately focused on corporate social responsibility. These discussions are primarily related to the approaches, strategies, and processes of corporate social responsibility, their implementation and evaluation. Other responsibility dimensions such as individual social responsibility and global social responsibility have yet to be explored among management academics. In this chapter, besides corporate social responsibility, the authors explore individual social responsibility and global social responsibility from the Vedanta philosophy (a part of Hinduism) with reference to the Bhagavad- Gita. There is also a review of social responsibility literatures from other religious traditions, including Islamic. Christian. Confiician and Buddhist philosophies. The Bhagavad-Gita. which is part of the Mahabharata (a Hindu epic), is an important reference for Vedanta philosophy (religion), but it has not been explored from the context of social responsibility (except for few corporate social responsibility articles). In this chapter, the authors attempt to fill the gap in the literature by exploring the philosophies of social responsibilities (individual, corporate and global) from the Bhagavad-Gita. The authors employ hermeneutics, a qualitative research methodology which involves the study, understanding and interpretation of the Bhagavad-Gita in the context of social responsibility. In a nutshell, the Bhagavad-Gita provides a duty and action (dharmic and karmic) approach to social responsibility which starts from individual social responsibility (svadhanna and asrama dliarma based on individual nature or svabhava), to corporate social responsibility (vamaasrama dliarma) and it moves towards global social responsibility (nta dharma - lokasangraha or global welfare). The leaders and the roles they play as individuals, m corporations and as global citizens are crucial in ensuring transparency, good conduct and governance towards the ultimate aim of achieving individual social responsibility, corporate social responsibility and global social responsibility. This chapter is expected to provide a framework to the study of Bhagavad-Gita (Vedanta) from other aspects of corporate management; such as corporate governance, corporate ethics and human resource management.
... financial crisis showed its effects in 2008 and the crisis started at the same time both in Europe and in the USA (Adamu, 2009). On the basis of the existing literature on this issue (Section 2.2), the lack of CSR is one of the causes of the crisis and CSR is a tool for helping firms to manage the consequences of the crisis. ...
We study the role of corporate social responsibility (CSR) in the international banking industry. We first investigate whether there are significant differences in accounting and market variables between two groups of banks: CSR banks and non-CSR banks. Towards this end we perform t-tests for the equality of means on a large sample of banks over the period 2004-2013. Second, we try to detect whether there is a particular pattern of environmental, social and corporate governance (ESG) scores over time and especially whether the 2008 financial crisis had an impact on the ESG scores. We find that CSR banks, compared with non-C'SR banks, are larger, more profitable, and more efficient, more leveraged and have greater liquidity buffers. The ESG scores, especially those relating to environmental and corporate governance performance, improve in the post-crisis period, suggesting that CSR is bemg used as a tool to manage the consequences of the crisis.
... The African RHIX is around 0 from 1997 to 2005 except for the years 1999 and 2000, as shown in Figure 3(b). We can observe that the RHIX of Africa is high during the global financial crisis, which is coherent with Adamu (2009) where the relation between the global financial crisis and some developing countries in Africa, such as Nigeria is reported. However, even during the global financial crisis, the RHIX was around 0.4, which is relatively low compared to RHIX of other continents. ...
Measuring market fear is an important way of understanding fundamental economic phenomena related to financial crises. There have been several approaches to measure market fear or panic level in a financial market. Recently, herd behavior has gained its popularity as important economic phenomena explaining the fear in the financial market. In this paper, we investigate herd behavior in global stock markets with a focus on intercontinental comparison. While various risk measures are available for the detection of herd behavior in the market, we use the standardized herd behavior index in Dhaene et al. (Insurance: Mathematics and Economics, 50, 357-370, 2012b) and Lee and Ahn (Dependence Modeling, 5, 316-329, 2017) for the comparison of herd behaviors in global stock markets. A global stock market data from Morgan Stanley Capital International is used to study herd behavior especially during periods of financial crises. © 2018 The Korean Statistical Society, and Korean International Statistical Society.
... This is as a results of lack of Corporate Governance (CG) practices, corruptions in the system, reckless loan provision, loans given to family member without paying back, bad debt, unethical banking practices, including the inflation of revenue, the distortion and manipulation of financial statement, diversion of bank funds and granting of unsecured credit facilities without proper authorization were is still found operating in the insurance firm and others financial services in Nigeria (Central Bank of Nigeria 2011; Sanusi, 2012). This was the time when the market capitalization of Nigeria dropped significantly from N12 trillion to N9 trillion (Adamu, 2009). ...
Purpose: The growing debate on the board of director mechanisms to firm performance will for a long time remain area of research. The effectiveness of the board of director composition, responsibility, and accountability have become an area of research in the recent trend. This paper attempts to investigate the empirical study of the relationship between the board of director mechanisms and perceived performance of listed firms in Nigeria. The underpinning theory of the paper is rooted in agency theory and supported by resource dependence theory, and stewardship theory to increase the understanding of the influence of the board of director formation to perceived firm performance. The questionnaires were administered to the respondents, out of 182 questionnaires administered, 117 were returned. The number of valid questionnaires is 114. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). Empirical findings showed that board of director composition and accountability were positively associated with perceived firm performance. While the board of director responsibility has no relationship. Based on the knowledge of this paper, this is the first study that adopts the use of primary data to investigate the empirical study of the relationship between the board of director mechanisms and perceived performance of listed firms in Nigeria. The findings provide policymakers, stakeholders, and government with the approaches to overcome and resolved the conflict of interest between the board of director (agent) and shareholder (principal). The paper also offers some suggestions for future study.
... Cobra sentido, nº 91 enero-abril 2014, ISSN: 1889-7045 157-171 entonces, establecer listados y rankings de empresas, al modo como lo pretende llevar a efecto el India Institute of Corporate Affaires (http://www.iica.in/). En línea con lo que acabamos de comentar respecto a la aproximación india al fenómeno de la RSE, cabe decir que la literatura académica ha venido discurriendo, al respecto de la RSE y la crisis, por el estudio del modo como han reaccionado las empresas -no ya los reguladores-en ámbitos geográficos distintos (Arévalo, 2010;Iamandi, et al. 2010;Adamu, 2009;Karaibrahimoglu, 2010;Naudé, 2009;Birth, 2008;Njoroge, 2009). ...
After assuming the fact of the recurrence of economic cycles and crises, and after identify some of the causes for the one we are living in nowadays, the article critically reflects on the concept of CSR from a theoretical point of view. In orderto connect some recent institutional providence with a robust idea for CSR, it will be bet for a moral approach, where CSR–beyond the legal requirements; but far from any kind of arbitrary practices– is understood from the strategy andin line with the telos, i.e., the very raison d’etre for companies and businesses insociety, in search for the Common Good.
... Financial crisis generally refers to a situation whereby the values of financial institutions or assets drop rapidly (Abdul, 2008). A financial crisis is often associated with a panic or a run on the Banks in which investors sell off assets or withdraw money from savings accounts with the expectation that the value of those assets will drop if they remain at the financial institution. ...
This paper examines the effect of global financial crisis and the sovereign debt crisis on public sector accounting. The global financial crisis and sovereign debt crisis were contextually analysed bringing out clearly its effect on public sector accounting which include accounting issues related to public sector intervention, accounting for recapitalization of investment, accounting for fiscal support, accounting for financial guarantees. The paper found out that, the unresolved fiscal and debt problems in some European countries and elsewhere could threaten the global economy. The implication of this is that, there is need for transparent financial reporting by government and improvement in the management of public sector resources. That, third world countries should avoid sub optimal debts structure.
... The financial crisis, starting in 2007 in US because of the liquidity shortfall in the banking system (Taylor & Williams, 2009) impacted European market in 2008(European Commission 2009Aizenman, Chinna & Ito, 2010). The effects of financial downturn, such as stock indexes fall, financial institutions collapse, higher unemployment, poverty, etc. (Adamu, 2009;Giannarakis & Theotokas, 2011;Wim, 2009), are being relevant. As a result, the role of business in the current context becomes one of the main issues in the centre of the economic debate and it points out the social responsibility (SR) as a paradigm of modern business in the global economic crisis (Hristache, Paicu & Ismail, 2013;Krauss, Rūtelionė & Piligrimienė, 2010;Fernandez-Feijoo, 2009). ...
Proactive Social Responsibility (PSR) plays a relevant role building competitive advantage and supporting organizational success in cooperatives. It is particularly desirable and challenging in recession periods. This paper studies how economic crisis impacts in different levels of cooperatives, and it aims to identify how PSR can be restored. In order to explore the organizational behaviour, the case study approach was selected to analyse three manufacturing cooperatives located in the Basque Country (Spain). The paper identifies three sources of hinders of PSR in cooperative context and it proposes two conditions to develop PSR. The originality of the paper relies on pushing the research of the organizations' responsibility face to the crisis periods, diving into the cooperatives black box to catch the problems hindering their PSR, and proposing PSR leverages in cooperatives.
The study examined the impact of economic recovery on market capitalization in Nigeria. The specific objectives of the study include: to examine the effect of Gross Domestic Product (GDP) growth rate on market capitalization, to determine the influence of Inflation rate on market capitalization and to assess the impact of Exchange rate on market capitalization. To achieve the objective of the study, ex-post facto research design was adopted. The researcher used secondary data in collating the required data. The data were collected from CBN statistical bulletin. In testing the hypotheses, multiple regression analysis was used. The findings revealed that GDP growth rate has positive impact on market capitalization while inflation rate and exchange rate have negative impact on market capitalization. The study recommends that Nigeria government should devise a means of increasing gross domestic product growth rate through effective utilization of their revenue allocation and expending. The study also recommends that during economic recovery, Nigeria government should ensure that their inflation rate is reduced. Inflation being the major economic factor that can be hampered by economic recession can reduce market capitalization in Nigeria.
This paper explains the nature of multidisciplinary stochastic-time series and control engineering research of strategic importance in systematic stock market characterisation and development (SSMCD), financial policy and wider macroeconomic management. It identifies some research topics and disciplines which support systematic characterisation of a stock market, such as will determine its resilience, performance and future development.
The main objective of this study is to determine whether improved ethical behaviour of accountants is capable of mitigating an economic meltdown. The study employed the descriptive research design, and a survey of chartered accountants was carried out to elicit their opinion on the subject matter. The formulated hypotheses were tested using one-sample Z test. The study findings show that ethical behaviour of accountants is capable of mitigating creative accounting practices in Nigerian companies. Secondly, ethical behaviour would influence the level of transparency in information disclosure. Thirdly, there is a high level of compliance with ethical standards by Nigerian accountants. Based on this the study recommends that a re-visitation of existing guiding ethical standards. Strict enforcement of promulgated ethical standards: This enforcement should be encouraged in both work place and professional practice. Specifically, professional monitoring teams should be established to monitor the enforcement of this.
Article Info: The study examined the roles played by accountants to ensure the survival of their respective organizations during the Nigerian Economic recession of last quarter of 2015 to third quarter of 2017. The survey method of research design was adopted for the study. Population of the study comprised 103 accountants representing one accountant selected from each of the companies/business organizations in the two sectors of the Nigerian economy selected for the study. Sample size was arrived at 82 using Taro Yamen method. Data were collected from primary source through interview and questionnaire. The formulated hypotheses were tested using Cronbach Alpha, Weighted Mean and Paired T-test. Findings revealed that accountants played significant roles towards improving revenue and reducing operating costs/expenses during the recession. They also played significant roles to ensure retention of workers and customers/clients as well as in coping with competitors, inflation and in recovery of loans during the recession. Consequent on the findings it was recommended that constant training of accountants by their firms and professional bodies will help to equip them intellectually on the signals of economic recession and how to tackle it before it renders its havoc.
The study evaluated the nexus of economic growth, foreign direct investment and financial crisis in Nigeria between the periods of 2007q1 to 2018q4. The study utilized Vector Error Correction Model (VECM) approach, Impulse Response function Analysis (IRF), Bayer-Hanck cointegration test, and Toda Yamamoto causality test to analysed the relationship. Augmented Dickey-Fuller (ADF) unit root test and Phillip-Perron (PP) test was used to verify the presence and confirmation of unit root. It was found that there is a positive long run relationship between foreign direct investment, financial crisis and economic growth in Nigeria, and that financial crisis unidirectional granger causes economic growth. The study concluded that there is a long run and positive relationship between foreign direct investment, financial crisis and economic growth in Nigeria. The study therefore recommends that government provide a sound macroeconomic policy that ensures proper utilization of foreign direct investment, in addition to comprehensive adjustment of macroeconomic policies to achieve and maximize the expected positive impact of financial crisis on Nigerian economic growth.
This study focused on the evaluation of volatility persistence and examining the asymmetric effect on the Nigerian capital market. This study employed Exponential Generalized Autoregressive Conditional Heteroscedasticity (EGARCH-in-Mean) model in order to accommodate the asymmetric effect. The estimates from EGARCH model supported the existence of asymmetric effect on the Nigeria capital market. It discovered as well that the Nigerian stock market showed evidence of volatility persistence but not significant. The results confirmed that negative shocks increase volatility more than positive shocks of the same magnitude. Therefore, the researchers recommended among others that, Nigerian capital market should ensure timely disclosure and appropriate dissemination of company related information to the public or investors in order to avert escalation of bad news which increases volatility.
Утицај кризе на развијене земље, земље у развоју и земље са на‐
стајућим тржиштем, испољава се и у реалном и у финансијском сек‐
тору. Док су механизми трансмисије преко трговине једноставни,
механизми трансмисије кроз финансијске канале чине се комплек‐
снијим, зато што су финансијске везе сложеније од интернационалне
трговине.
Забринутост због могућности прерастања финансијске кризе у
другу велику депресију довела је до драстичног пада на тржишту ак‐
ција и знатног губитка поверења потрошача и фирми у тржишне ин‐
ституције широм света. На развијеним тржиштима, у оквиру финан‐
сијског сектора, криза је највише погодила банкарски сектор, а нај‐
мање сектор осигурања. Утицај финансијске кризе на банке широм
света испољавао се кроз повећану неизвесност у погледу квалитета
дужника и мању доступност извора финансирања. Финансијска кри‐
за је преко погоршања фискалне позиције земље, утицала на погор‐
шање перформанси тржишта државних обвезница.
Током иницијалних фаза, хипотекарна криза је мање утицала на
земље са настајућим тржиштем него на развијене привреде. Дуго‐
трајнија дисфункционалност тржишта, погоршавање економских
услова у развијеним привредама и растућа глобална аверзија на ри‐
зик, утицали су сигнификантно на земље са настајућим тржиштем од
краја 2008. године. Распламсавање финансијске кризе највише је ути‐
цало на земље са настајућим тржиштем са великим дефицитима те‐
кућег рачуна и чије банке су се пре кризе, у великој мери, ослањале
на страно финансирање на велико.
Dividend policy decisions in the emerging markets has continued to receive attention lately in academic research due to the differences observed between developed and emerging markets and sparse empirical evidence in this area. This research is directed towards the emerging markets in Africa. It investigates dividend decision in 299 companies listed in Nigeria on Nigerian stock exchange market. This paper compares dividend decisions in the pre-crisis, crisis and post-crisis periods. Six possible determinants of dividend policy was analysed using correlation and multiple regression analysis for a period of 13 years (2002 to 2014). The companies are segregated into active and dead groups for the purpose of the analysis. This paper contributes to the current body of knowledge by giving more insights to dividend policy in the largest economy in Africa taking account of the financial crisis of 2008. Liquidity and growth opportunities are common predictors in the three periods. Results are in support of agency, pecking order and signalling theories. The predictors in the regression model explains 42% variability in dividend policy before the crisis in Nigeria but about 20% during and afterwards.
finance literature. Information of the equity premium is a significant
statistic for the useful distribution and valuation of capital resources. Equity
premium can be used for valuating cost of equity as well as for the
calculation of expected return from an investment. The study explores
equity premium and its determinants in the context of Pakistan stock
market.
The main objective of this study to investigate the relationship between a
set of macroeconomic and non-economic factors affecting firm level equity
premium. The equity premium determinants are divided into three different
categories according to its different level and behaviour like company
specific factors, macroeconomic factors and non-economic factors. In this
book we examine the interplay between macro-economic and firm level
equity premium followed by non-economic factors and equity premium.
This study gives certain insights to fund managers, investors and policy
makers for taking necessary steps in possible accurate decision making
from their own perspectives.
We explored that change in macroeconomic factors cause change in stock
returns which leads to affect the firm level and industry level equity
premium. Following the concept of macro-based risk factor model, we
consider macroeconomic variables as determinants of firm level equity
premium. The macroeconomic variables we considered include interest rate,
money supply, industrial production, inflation and foreign direct
investment. The macroeconomic variables are not in control of the firm's
management. These are the external factors which affect the company as
well as the overall market returns. The Macro-based Multi-factor Model is
estimated for the whole sample. It is found that the market premium and the
selected five macroeconomic factors significantly affect the firm level
equity premium of non-financial firms. Increase in market premium, money
supply, foreign direct investment and industrial production positively affect
the firm level equity premium while increase in interest rate and inflation
negatively affects the firm level equity premium. These findings are
beneficial for the common shareholders, institutional investors and policy
makers to find more specific insight about the relationship between
macroeconomic variables and equity premium of non-financial sectors.
Furthermore, we examined the non-economic factors in connection to firmlevel
equity premium for the first time in context of Pakistan stock
exchange. The non-economic factors included are terrorism, government
stability, law and order and government regime change. In addition to this,
2008 global financial crises dummy are also used to see break between the
pre-crises and post crises returns. The estimated results reveal that terrorism has statistically significant negative impact on firm level equity premium in
Pakistan. Controlled law & order variable has significant positive effect on
firm level equity premium, which implies that equity premium increases
with the improvement in law & order situation in the country. Equity
premium also increases with government stability and when there is
democratic system in the country. The results also reveal that global
financial crisis of 2007/08 negatively influenced the firm equity premium.
Conclusively, this study makes a significant contribution to existing
literature with respect to decision making at different levels. This concludes
that the investors and policy makers need to review but not limited to
macroeconomic variables and the non-economic factors as determinants of
equity premium. This can help in better industry diversification and
calculations of expected rate of returns. The firms itself can greatly be
benefited from the analysis for better financial management decisions.
Further policy implications are discussed in the conclusion chapter of this
study.
By the end of this chapter, you should be able to:
هناك العديد من الاخطاء التي ارتكبت في تعامل الدول مع الازمات الاقتصادية مثل الازمة الاسيوية 1997 و2002 والعالمية 2008 وتم تشخيص أهم العوامل المسببة للاضطرابات: التدفق المتذبذب لراس المال الاجنبي، وتدهور الطلب الخارجي على السلع الاسيوية، مفترضين ان زيادة التقلبات ناتجة عن تزايد الترابط والانفتاح العالمي في الاسواق الدولية. نفذت هذه الدراسة عدد من المحاولات مستخدمة طريقة العزوم المعممة GMM لاختبار أثار الازمات في عدد من الدول الاسيوية خلال الفترة 1990-2012. واهم ما توصلت الية هو ان التوقفات الفجائية لراس المال الاجنبي خلال الازمة العالمية 2008 كان له الاثر السلبي الاكبر في تذبذب معدلات النمو الاقتصادي في آسيا بينما كان للصادرات دورا إيجابيا في تغطية العجز التجاري وتحفيز النمو الاقتصادي.
Godwin Chigozie Okpara et al./ Elixir Finance 42 (2012) 6410-6414 6410 Introduction The recent emergence of new capital markets, the relaxation of foreign capital controls and the adoption of more flexible exchange rate regimes have increased the interest of academics and practitioners in studying the interactions between the stock and foreign exchange markets. The gradual abolition of foreign exchange controls in emerging and developing economies has opened the possibility of international investment and portfolio diversification. At the same time, the adoption of more flexible exchange rate regimes by these countries in the late 1980s and early 1990s has increased the volatility of foreign exchange markets and the risk associated with such investments. There is theoretical consensus neither on the existence of relationship between stock prices and exchange rates nor on the direction of the relationship. Considering flow oriented models (FOM) and stock oriented models (SOM) as two basic approaches to the exchange rate determination, a cardinal disagreement can be found. Flow Oriented Models assume that the exchange rate is determined largely by a country's current account or trade balance performance. These models posit that changes in exchange rates affect international competitiveness and trade balance, thereby influencing real economic variables such as real income and output and hence changes in stock prices (Dornbusch and Fisher, 1980). On the other hand, stock oriented models put much stress on the role of capital account in the exchange rates determination. A rise in domestic stock prices leads to the appreciation of domestic currency through direct and indirect channel. A rise in stock prices encourages investors to buy more domestic assets selling simultaneously foreign assets to obtain domestic currency indispensable for buying new domestic stocks. Described shifts in demand and supply of
The purpose of this study is to diagnose the causal relationships between crude oil price and the indicators of the stock market, and on the economic growth in Nigeria, a typical oil-dependent economy during the regime of global financial crisis and regime of no global financial crisis using a dummy-augmented Toda and Yamamoto causality testing procedures. Dummy-augmented model is used to assess the relative causal impacts of the variables on another in the regime of global financial crisis and regime of no global financial crisis. The results of the empirical findings imply that the causal relationship between the oil prices, the stock market indicators and the economic growth may be better in diagnosed if adequate attention is given to the two economic regimes using the augmented T-Y model.
Corporate Social Responsibility (CSR) is a fuzzy concept, but is critical in many contexts
and situations. In Kenya
, CSR is viewed by organizations as a necessary but voluntary
commitment. More succinctly, a long-term
commitment to sustainable outcomes motivates organizations to consider social, economic
, legal and environmental
rights. Despite the nobility of CSR, organizations and wider society variously consider it either a blessing, a curse or a ‘necessary evil’. In challenging and turbulent times, these perspectives become even more significant, since while the pursuit of CSR is considered critical for sustainability, competing needs make it unlikely to be considered a priority. In a Kenyan context
, we have deliberately dubbed such an era as the ‘adolescence age’, which relates to a relatively early and fragile period in a country’s history. Accordingly, Kenyan organizations are undergoing difficult times, and the resources necessary for CSR are diminished or non-existent. Stakeholder
expectations are not commensurate with reality, and societal expectations are rising. In the chapter, we start by considering CSR and its enduring benefits
in a Kenyan context. We then examine the social, economic, legal, environmental and political
challenges
currently faced by corporate organizations who are seeking to pursue CSR in Kenya. Next, we examine the strategies being used by Governments, International Organizations and NGOs to lessen the burden of these challenges. Finally, we discuss how SMEs are attempting to deal with these challenges, and we present some conclusions and implications for theory and research.
The essence of this study is to examine the impact of the global financial crisis of 2007- 2009 on cocoa production in Nigeria. Although the crisis had its roots in American financial markets, it percolates very rapidly to other economies throughout the entire global financial markets through several transmissions medium. Our main concern was to determine if the crisis in question created any structural changes in cocoa export in Nigeria or not. To achieve our objectives, we collected data spanning from 2004 to 2014. Subsequently we divided our sample into two subsamples- pre crisis period, post crisis period and applied the least square technique to the two subsamples and the pooled sample to test the statistical significance of all the identified variables. It appears that the crisis did not produce any structural changes in cocoa export in Nigeria. In the light of this finding, it is our considered opinion that Cocoa export offers alternate source of stable foreign exchange earnings that is immune from negative demand shocks and vagaries of uncertainty. Therefore, it behooves on the Nigerian policy makers to evolve policies that will promote Cocoa production in order to diversify the Nigeria economy and forestall the drift that Crude oil price volatility has exposed her economy to.
The current meltdown in global banking and credit markets, which bears the unlikely name of the "sub-prime lending crisis," threatens to destroy asset values, financial markets, and national economies across the globe. The proximate cause of this situation was the end of the US housing bubble, which precipitated a rapid increase in mortgage delinquencies, especially among subprime mortgages issued in overheated markets. Since these mortgages were held in securitized form in portfolios around the world, these payments difficulties at the base of the financial food-chain led to seismic financial-market eruptions at the top. In the U.S., thousands of households have already lost their homes. The economy as a whole now resembles the submarine in the movie Das Boot: it has dived well below its tolerance level: oxygen is running low, and one valve after another is exploding under the pressure. It is too soon to know the ultimate impacts of this crisis, but not too soon to explore its causes. Some analysts have already identified the moving force of this episode: greed and overreach by globe-spanning financial firms.1 This diagnosis is correct. At the same time, it fingers a perenial feature of the Wall Street jungle. To point only to the long history of financial meltdowns, with the obligatory references to John Law and Kindleberger (1978), is to ignore unique characteristics of this crisis. This essay argues that two intertwined aspects of US banking behavior, largely overlooked until now in discussions of causes of the subprime crisis, are among its root causes: the strategic transformation of banking at the onset of the neoliberal era; and long-established patterns of racial exclusion in the US markets for housing credit. Here we use the "balance-sheet approach" advocated by Hyman Minsky to understand why the strategic transformation of banking in the neoliberal age led step-by-step to practices that now are revealed as eminently risky. Banks transformed their revenue-generation strategies due to macro- and micro-distress at the onset of the neoliberal age. These changes also transformed the structural relationships between loan- making and risk-taking, on one hand, and between banks' management and absorption of risks, on the other. That is, banks hit upon strategies that appeared to fundamentally reduce the risks associated with banking and financial intermediation activities. However, in adopting these strategies, banks ceased to perform some of their key roles in the economy as a whole. When banks generate default risks and liquidity risks through loan-making, and absorb those risks on their balance sheets, there are built-in breaks in tendencies toward speculative and overly-risk lending. For as default risks build up in the latter stages of an expansion, banks must consider both that default risk might worsen on marginal loans, at the same time that the liquidity risks of funding their entire asset portfolio are increasing. When
We are in the midst of the worst financial crisis since the Great Depression. This crisis is the latest phase of the evolution
of financial markets under the radical financial deregulation process that began in the late 1970s. This evolution has taken
the form of cycles in which deregulation accompanied by rapid financial innovation stimulates powerful financial booms that
end in crises. Governments respond to crises with bailouts that allow new expansions to begin. As a result, financial markets
have become ever larger and financial crises have become more threatening to society, which forces governments to enact ever
larger bailouts. This process culminated in the current global financial crisis, which is so deeply rooted that even unprecedented
interventions by affected governments have, thus far, failed to contain it. In this paper we analyse the structural flaws
in the financial system that helped bring on the current crisis and discuss prospects for financial reform.
The global credit crisis has led to systemic instability, the accrual of massive losses in major US and European banks, and created significant public costs. It has also shown that the current model of national and international banking regulation is inadequate. This paper attempts to answer questions relating to the future shape of national and international financial regulation in light of lessons drawn from this crisis. While most policy proposals for the overhaul of the US, UK, and international financial regulation predominantly deal with issues relating to the containment of a systemic crisis, the paper offers more radical solutions, which deal with the prevention of such a crisis. In this mode, it suggests a pluralistic regime for the licensing and supervision of banking institutions at a domestic level and the establishment of a global multi-tiered licensing and supervisory scheme for transnational investment funds with systemic importance. The supervision of investment funds' compliance with the suggested prudential regime should be assigned to an independent global regulatory authority, which would utilize the market research and surveillance infrastructure of the IMF. The findings of behavioural finance provide solid support for the suggested reforms.
Imitative behavior and contagion are well-documented regularities
of financial markets. We study whether they can occur in a two-asset
economy where rational agents trade sequentially. When traders have
gains from trade, informational cascades arise and prices fail to aggregate
information dispersed among traders. During a cascade all
informed traders with the same preferences choose the same action,
i.e., they herd. Moreover, herd behavior can generate financial contagion.
Informational cascades and herds can spill over from one asset to
the other, pushing the price of the other asset far from its fundamental
value.
The authors study the relationship between asset prices and herd behavior, which occurs when traders follow the trend in past trades. When traders have private information on only a single dimension of uncertainty (the effect of a shock to the asset value), price adjustments prevent herd behavior. Herding arises when there are two dimensions of uncertainty (the existence and effect of a shock), but it need not distort prices because the market discounts the informativeness of trades during herding. With a third dimension of uncertainty (the quality of traders' information), herd behavior can lead to a significant, short-run mispricing. Copyright 1998 by American Economic Association.
Financial crises are widely argued to be due to herd behavior. Yet recently developed models of herd behavior have been subjected to two critiques which seem to make them inapplicable to financial crises. Herds disappear from these models if two of their unappealing assumptions are modified: if their zero-one investment decisions are made continuous and if their investors are allowed to trade assets with market-determined prices. However, both critiques are overturned -- herds reappear in these models -- once another of their unappealing assumptions is modified: if, instead of moving in a prespecified order, investors can move whenever they choose.
The Implication of Global Financial Crisis on International Marketing’ Unpublished M
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