KCA Journal of Business Management

The Effects of Firm Strategic Factors on Manufacturing Companies’ Performance: Evidence from Nigeria

Sylvanus S. Adamade, Umar Gunu — Wed, 28 Jun 2017 00:00:00 +0000

The effects of firms’ strategic factors on strategic choices and performance differentials in Nigerian manufacturing sectors have not been systematically investigated. Against the backdrop of declining manufacturing performance in Nigeria, this paper examined the effects of selected firm strategic factors on the returns on invested capital in Nigeria’s manufacturing sector. The study sample consisted of 30 quoted manufacturing firms spread over eight industrial sectors. Data was collected from these 30 firms over a five year period (i.e. 2003 to 2007 and analyzed using a panel regression model. A key finding of the study is firm strategic factors in the study i.e. size, age and capital intensity were heterogeneous and related differently to the performance parameter - return on invested capital. Size had a positive effect on returns on invested capital while age and capital intensity had negative effects. The study concluded that firm strategic factors influenced returns on invested capital differently for manufacturing firms. It was therefore recommended that emphasis on resources and capabilities should be sustained to boost the strategic performance of Nigerian manufacturing sectors.

Keywords: Firm Strategic Factors, Manufacturing Companies, Performance, Nigeria

Exchange Rate Reform Policies and Trade Balances in Nigeria

Taiwo Razaq Ibrahim, Temidayo Oladiran Akinbobola, Ikotuna Joseph Ademol — Wed, 28 Jun 2017 00:00:00 +0000

This paper investigates the effect of the exchange rate on the trade balance in Nigeria between 1970 and 2012. Annual data were collected from the Central Bank of Nigeria’s Statistical Bulletin, and World Development Indicator of the World Bank. Co-integrating and Error Correcting Method were used for this estimation. The main findings that emerged from the study were that; the levels of income of the country as well as its trading partners were strong determinants of the trading activities in Nigeria economy, the effect of exchange rate on trade balance was significant in the long run, but contrary to the aspiration of the policy makers and in contrast to the j- curve hypothesis, the exchange rate had an inverse relationship with the trade balance in Nigeria.

Keywords: Exchange Rate, Trade Balances, National Incomes JEL Classification Codes: F31, F19, F43

Determinants of Foreign Direct Investment and Its Causal Effect on Economic Growth in Nigeria

Osemene Olubunmi Florence, Kolawole Kayode David, Olanpeleke Ibukun Daniel — Wed, 28 Jun 2017 00:00:00 +0000

Foreign direct investment (FDI) is an important tool for the growth of any economy as it is more stable than several forms of capital flows. The consensus is that it provides the much needed requirement for economic development and growth. However, evidences in Nigeria have shown FDI crowding out of domestic firms and possible contraction in the total industry or employment. Hence, this study primarily examined the determinants of FDI and its causal effect on the economic growth in Nigeria. The study specifically examined the effect of macroeconomic variables as the determinants of FDI in Nigeria as well as examined the causal effect of FDI on economic growth in Nigeria. In line with the objectives set to be achieved, the study used co-integration test and vector error correction model on the time series data collected from 1984 to 2015. The study revealed that foreign direct investment is negatively related to economic growth, export, inflation and interest rate while foreign direct investment is positively related to exchange rate and import. All these variables were statistically significant in determining FDI in Nigeria. The study concluded that FDI has a positive impact on the growth of Nigerian economy. Hence, it is recommended that government of Nigeria should promote import liberalisation through the reduction of tariffs; reduce the importation of consumable and intermediate goods and encourage the local industries to produce such goods.

Keywords: Foreign direct investment, economic growth, Nigeria

The Effects of Relationship Banking and Entrepreneurial Orientation on Financial Performance of Manufacturing Firms in Kenya

Abraham Kipkemboi Rotich, Kenneth Wanjau — Wed, 28 Jun 2017 00:00:00 +0000

The purpose of the study was to determine if relationship banking, and entrepreneurial orientation (EO) affect the financial performance of manufacturing firms in Kenya. The study adopted a cross-sectional research design with the population being 620 manufacturing SMEs involved in relationship banking with commercial banks in Kenya. Stratified random sampling was employed to pick a sample of 138 manufacturing SMEs with the respondents being the owner/ managers of the sampled SMEs. A semi structured questionnaire was used for data collection. The data was analyzed regression analysis with the moderating effects of EO being tested using the moderated multiple regression. The study revealed that EO moderates the relationship between relationship banking and financial performance of manufacturing SMEs in Kenya. The study concluded that relationship banking and financial performance have a positive relationship and that EO moderates this relationship. By forging strategic links with the banks, manufacturing SMEs would be able to access funding which is key to their growth and survival.

Keywords: Relationship Banking, Entrepreneurial orientation, Financial Performance