This study explored the ripple effect and consequences of correspondent banking de-risking on global financial inclusion and stability, with a specific focus on evidence from Europe. Driven primarily by increased compliance requirements and the need to mitigate risks associated with anti-money laundering and combating the financing of terrorism regulations, de-risking led to the termination of correspondent banking relationships with various countries and financial institutions. The research aimed to understand the implications of this phenomenon on financial integration, access to essential financial services, and the exacerbation of economic disparities among different regions and demographic groups in Europe. A descriptive research design approach was employed, mainly quantitative analysis of CBR data and regulatory changes. The findings demonstrated that de-risking had a significant negative impact on financial inclusion and stability, particularly for small and medium-sized enterprises, non-profit organizations, and marginalized communities. Moreover, the termination of CBRs disrupted the flow of remittances, trade finance, and development aid, and led to an increased reliance on less-regulated, informal channels, which in turn undermined the global AML/CFT regime and exacerbated financial crime and systemic risks. Based on these findings, the study recommended enhancing collaboration and coordination among regulatory authorities, financial institutions, and affected stakeholders to develop a harmonized regulatory framework across European countries, implement a risk-based approach, and establish a centralized information-sharing platform. Additionally, targeted capacity-building efforts, exploration of innovative financial solutions, and the development of financial inclusion strategies prioritizing the needs of the most vulnerable segments of the population were recommended to counteract the negative effects of de-risking and promote financial inclusion and stability in Europe. Keywords: Correspondent banking de-risking, financial inclusion, global financial stability, anti-money laundering, combating the financing of terrorism
{"title":"Exploring the Ripple Effect and Consequences of Correspondent Banking De-Risking on Global Financial Inclusion and Stability: Evidence from Europe","authors":"James Swift Banville","doi":"10.53819/81018102t4131","DOIUrl":"https://doi.org/10.53819/81018102t4131","url":null,"abstract":"This study explored the ripple effect and consequences of correspondent banking de-risking on global financial inclusion and stability, with a specific focus on evidence from Europe. Driven primarily by increased compliance requirements and the need to mitigate risks associated with anti-money laundering and combating the financing of terrorism regulations, de-risking led to the termination of correspondent banking relationships with various countries and financial institutions. The research aimed to understand the implications of this phenomenon on financial integration, access to essential financial services, and the exacerbation of economic disparities among different regions and demographic groups in Europe. A descriptive research design approach was employed, mainly quantitative analysis of CBR data and regulatory changes. The findings demonstrated that de-risking had a significant negative impact on financial inclusion and stability, particularly for small and medium-sized enterprises, non-profit organizations, and marginalized communities. Moreover, the termination of CBRs disrupted the flow of remittances, trade finance, and development aid, and led to an increased reliance on less-regulated, informal channels, which in turn undermined the global AML/CFT regime and exacerbated financial crime and systemic risks. Based on these findings, the study recommended enhancing collaboration and coordination among regulatory authorities, financial institutions, and affected stakeholders to develop a harmonized regulatory framework across European countries, implement a risk-based approach, and establish a centralized information-sharing platform. Additionally, targeted capacity-building efforts, exploration of innovative financial solutions, and the development of financial inclusion strategies prioritizing the needs of the most vulnerable segments of the population were recommended to counteract the negative effects of de-risking and promote financial inclusion and stability in Europe. Keywords: Correspondent banking de-risking, financial inclusion, global financial stability, anti-money laundering, combating the financing of terrorism","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83226908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigated the impact of macroeconomic factors on the financial performance of commercial banks in Indonesia. By analyzing a sample of Indonesian banks over a specified period, the research examines the relationships between bank profitability and key macroeconomic variables, such as interest rates, inflation, exchange rates, and economic growth. Employing literature review methodology, the study aimed to shed light on how these macroeconomic factors influence banks' financial performance and assess the implications for risk management, regulatory policies, and strategic decision-making. The study found that the findings of various empirical studies on the impact of macroeconomic factors on the financial performance of commercial banks highlight several key macroeconomic factors that significantly influence bank profitability and other financial performance indicators. These factors include interest rates, inflation, exchange rates, economic growth, and market competition. While the specific findings and magnitudes of the impacts may vary across different countries and regions, some common patterns and trends can be observed. Interest rates have been identified as a critical determinant of bank profitability. Studies have found that higher interest rates can negatively affect bank profitability, as they increase the cost of borrowing for banks, subsequently affecting their lending activities and overall profits. The study concludes that while the specific relationships and magnitudes of these impacts may vary across different countries and regions, understanding these interactions is essential for banks, regulators, and policymakers to make informed decisions and adopt effective strategies. Thus, commercial banks in Indonesia should closely monitor and manage their exposure to macroeconomic factors, such as interest rates, inflation, exchange rates, and economic growth, to maintain and improve their financial performance. Keywords: Macroeconomic factors interest rates, inflation, exchange rates, and economic growth
{"title":"Impact of Macroeconomic Factors on Financial Performance of Commercial Banks in Indonesia","authors":"Dyah Mahamud Idawati","doi":"10.53819/81018102t4129","DOIUrl":"https://doi.org/10.53819/81018102t4129","url":null,"abstract":"This study investigated the impact of macroeconomic factors on the financial performance of commercial banks in Indonesia. By analyzing a sample of Indonesian banks over a specified period, the research examines the relationships between bank profitability and key macroeconomic variables, such as interest rates, inflation, exchange rates, and economic growth. Employing literature review methodology, the study aimed to shed light on how these macroeconomic factors influence banks' financial performance and assess the implications for risk management, regulatory policies, and strategic decision-making. The study found that the findings of various empirical studies on the impact of macroeconomic factors on the financial performance of commercial banks highlight several key macroeconomic factors that significantly influence bank profitability and other financial performance indicators. These factors include interest rates, inflation, exchange rates, economic growth, and market competition. While the specific findings and magnitudes of the impacts may vary across different countries and regions, some common patterns and trends can be observed. Interest rates have been identified as a critical determinant of bank profitability. Studies have found that higher interest rates can negatively affect bank profitability, as they increase the cost of borrowing for banks, subsequently affecting their lending activities and overall profits. The study concludes that while the specific relationships and magnitudes of these impacts may vary across different countries and regions, understanding these interactions is essential for banks, regulators, and policymakers to make informed decisions and adopt effective strategies. Thus, commercial banks in Indonesia should closely monitor and manage their exposure to macroeconomic factors, such as interest rates, inflation, exchange rates, and economic growth, to maintain and improve their financial performance. Keywords: Macroeconomic factors interest rates, inflation, exchange rates, and economic growth","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83445495","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Effect of Ethics Education on Students' Ethical Decisions: A Preliminary Laboratory Experiment","authors":"Chaoping Li","doi":"10.12691/jfa-11-1-2","DOIUrl":"https://doi.org/10.12691/jfa-11-1-2","url":null,"abstract":"","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74192773","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dr Benedict Musyoki Mutua, Lucy Wamugo Dr, Joseph Theuri, B. M. Mutua
The insurance industry is instrumental in economic growth through enabling protection, capital creation and promoting commerce. However, there has been a decline in the insurance industry's profitability in Kenya. Hence, the study assessed the effect of insurance risks on the financial performance of insurance companies in Kenya. Specifically, the study examined the effects of credit risk, liquidity risk, solvency risk, reinsurance risk and underwriting risk on financial performance of insurance companies in Kenya. GDP was used as a moderating variable. The study was anchored on agency theory, credit risk theory, liquidity preference theory and collective risk theory. The target population included all the 53 licensed insurance companies operating in Kenya since 2015. A census approach was used. Explanatory research design and positivism research philosophy were utilized. Secondary data was gathered from audited financial statements submitted to Insurance Regulatory Authority for the period between 2015 and 2020. With the aid of STATA, panel data was analysed through descriptive statistics, correlation and regression analyses. The multiple regression results revealed that credit risk had a negative significant effect on financial performance, liquidity risk had a negative significant effect on financial performance, solvency risk had a negative significant effect on financial performance and underwriting risk had a negative significant effect on financial performance. But reinsurance risk had a positive insignificant effect on financial performance. GDP growth rate significantly moderates the relationship between the insurance risks and the financial performance of insurance companies in Kenya. The study recommended that insurance companies should have good credit risk management frameworks to minimize credit risks, implement proper investment portfolio management to guard against liquidity risks, in cases of negative asset base, increase the share capital, cover most of their claims themselves but ensure they have adequate reinsurance where high risk investment is involved and put in place proper policy estimation and valuation techniques.
{"title":"Insurance Risks and Financial Performance of Insurance Companies in Kenya","authors":"Dr Benedict Musyoki Mutua, Lucy Wamugo Dr, Joseph Theuri, B. M. Mutua","doi":"10.53819/81018102t5151","DOIUrl":"https://doi.org/10.53819/81018102t5151","url":null,"abstract":"The insurance industry is instrumental in economic growth through enabling protection, capital creation and promoting commerce. However, there has been a decline in the insurance industry's profitability in Kenya. Hence, the study assessed the effect of insurance risks on the financial performance of insurance companies in Kenya. Specifically, the study examined the effects of credit risk, liquidity risk, solvency risk, reinsurance risk and underwriting risk on financial performance of insurance companies in Kenya. GDP was used as a moderating variable. The study was anchored on agency theory, credit risk theory, liquidity preference theory and collective risk theory. The target population included all the 53 licensed insurance companies operating in Kenya since 2015. A census approach was used. Explanatory research design and positivism research philosophy were utilized. Secondary data was gathered from audited financial statements submitted to Insurance Regulatory Authority for the period between 2015 and 2020. With the aid of STATA, panel data was analysed through descriptive statistics, correlation and regression analyses. The multiple regression results revealed that credit risk had a negative significant effect on financial performance, liquidity risk had a negative significant effect on financial performance, solvency risk had a negative significant effect on financial performance and underwriting risk had a negative significant effect on financial performance. But reinsurance risk had a positive insignificant effect on financial performance. GDP growth rate significantly moderates the relationship between the insurance risks and the financial performance of insurance companies in Kenya. The study recommended that insurance companies should have good credit risk management frameworks to minimize credit risks, implement proper investment portfolio management to guard against liquidity risks, in cases of negative asset base, increase the share capital, cover most of their claims themselves but ensure they have adequate reinsurance where high risk investment is involved and put in place proper policy estimation and valuation techniques.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79654757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Mandatory Corporate Reporting and Financial Performance of Listed Manufacturing Companies in Nigeria","authors":"Ekpoattai Owoidighe Ime","doi":"10.12691/jfa-11-1-1","DOIUrl":"https://doi.org/10.12691/jfa-11-1-1","url":null,"abstract":"","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88297304","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Youth Enterprise Development Fund (YEDF) was introduced in 2006 as a strategy to broaden economic opportunities and promote youth participation in nation building. The effective utilization of the fund is vital if its objective of empowering young people through entrepreneurship. This study aimed to evaluate the correlation between financial management skills and the utilization of business development fund among youth groups in Baringo South Constituency. The study specifically sought to determine the relationship between investment decision making process, financial record management, saving behavior and cash flow management and the utilization of the YEDF in Baringo South Constituency, Baringo County, Kenya. Financial self-efficacy theory, goal setting theory, contingency theory and information asymmetry theory formed theoretical basis for this research. Researched entities was 22 YEDF-funded MSEs in Baringo South Constituency's. The study’s sample size was made up of 88 group officials, four fund managers and three youth fund officials. Questionnaires were used in the collection of primary data. Prior to the study, a pilot was conducted in Koibatek to test data gathering devices. Research data was collected qualitatively and quantitatively. Data was presented using tables and charts. The Statistical Package for the Social Sciences (SPSS) was used in the quantitative statistical analysis. The mean, standard deviation, frequencies, and percentages are used in descriptive. The study established a positive and significant relationship between the three independent variables: investment decision making, financial record management and saving behavior, and YEDF utilization among youth groups in Baringo South Constituency, Kenya. The study found a weak positive and significant relationship between cash flow management and YEDF utilization among youth groups in Baringo South Constituency, Kenya. The study recommended that entrepreneurial training for youth enterprises, and distinct saving accounts to assist youth groups organize their finances. It also emphasized on the importance of cash flow statements to help investors and shareholders understand how much money group is producing and spending. The study suggested that further studies should be conducted on financial management skills and use of government financial kits such Uwezo funds, Women Enterprise Development funds should be conducted. Keywords: Financial management skills, investment decision, financial records, saving behavior, cash flow, fund utilization.
{"title":"Financial Management Skills and Utilization of Youth Enterprise Development Fund among Youth Groups in Baringo South Constituency, Kenya","authors":"Alex Kipngetich Cheburet","doi":"10.53819/81018102t4128","DOIUrl":"https://doi.org/10.53819/81018102t4128","url":null,"abstract":"The Youth Enterprise Development Fund (YEDF) was introduced in 2006 as a strategy to broaden economic opportunities and promote youth participation in nation building. The effective utilization of the fund is vital if its objective of empowering young people through entrepreneurship. This study aimed to evaluate the correlation between financial management skills and the utilization of business development fund among youth groups in Baringo South Constituency. The study specifically sought to determine the relationship between investment decision making process, financial record management, saving behavior and cash flow management and the utilization of the YEDF in Baringo South Constituency, Baringo County, Kenya. Financial self-efficacy theory, goal setting theory, contingency theory and information asymmetry theory formed theoretical basis for this research. Researched entities was 22 YEDF-funded MSEs in Baringo South Constituency's. The study’s sample size was made up of 88 group officials, four fund managers and three youth fund officials. Questionnaires were used in the collection of primary data. Prior to the study, a pilot was conducted in Koibatek to test data gathering devices. Research data was collected qualitatively and quantitatively. Data was presented using tables and charts. The Statistical Package for the Social Sciences (SPSS) was used in the quantitative statistical analysis. The mean, standard deviation, frequencies, and percentages are used in descriptive. The study established a positive and significant relationship between the three independent variables: investment decision making, financial record management and saving behavior, and YEDF utilization among youth groups in Baringo South Constituency, Kenya. The study found a weak positive and significant relationship between cash flow management and YEDF utilization among youth groups in Baringo South Constituency, Kenya. The study recommended that entrepreneurial training for youth enterprises, and distinct saving accounts to assist youth groups organize their finances. It also emphasized on the importance of cash flow statements to help investors and shareholders understand how much money group is producing and spending. The study suggested that further studies should be conducted on financial management skills and use of government financial kits such Uwezo funds, Women Enterprise Development funds should be conducted. Keywords: Financial management skills, investment decision, financial records, saving behavior, cash flow, fund utilization.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91365843","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Kenyan manufacturing sector’s contribution to the economy has been declining. It has stagnated at 10% of the gross domestic product (GDP), contributing to an average of 10% from 1964-1973 and marginally increased to 13.6% from 1990-2007 and has been below 10% in recent years further dropping to 8.4% in 2017 and 7.1% in 2020 ultimately hitting its lowest in 2022 of 7.2%. The government has renewed its efforts to revive the sector to grow its contribution to GDP to 20% by 2030. Asset tangibility is a significant determinant of how counterparties and external financiers value a firm and hence turn around its fortunes. This study applied Dynamic Unbalanced Panel analysis techniques using Secondary data for 10-year period (2010 - 2019) with the study population comprising of 9 listed firms. A census of the firms was done and resulted to 86 observations. Focus was on asset tangibility moderated by economic growth rate and earnings volatility on firm value which was proxied by Tobin’s Q and EVA. Pecking order guided the study. Longitudinal research design was used as it is appropriate when dealing with panel data. STATA version 15 was used for analysis. Model estimation followed a two Step System GMM testing the study hypotheses at 5 % significance level. Pearson correlation coefficient was used to show the strength and direction of association among the study variables. ATNG was positively correlated with Tobin Q (r = 0.4331) and LnEVA (r = 0.3683). The regression weights were also positive and significant. The study therefore concluded that asset tangibility is imperative as it directly determines the financial burden firms face in their operations and recommended that the managers of manufacturing firms need to consider project financing to limit exposure to credit risk. Future studies can consider a balanced panel analysis and other panel data econometric techniques. Keywords: Asset tangibility, Firm Value, Financial Performance, Manufacturing firms.
{"title":"Asset Tangibility and Financial Performance: The Moderating role of Economic Growth and Earnings Volatility","authors":"A. Oganda","doi":"10.53819/81018102t2125","DOIUrl":"https://doi.org/10.53819/81018102t2125","url":null,"abstract":"The Kenyan manufacturing sector’s contribution to the economy has been declining. It has stagnated at 10% of the gross domestic product (GDP), contributing to an average of 10% from 1964-1973 and marginally increased to 13.6% from 1990-2007 and has been below 10% in recent years further dropping to 8.4% in 2017 and 7.1% in 2020 ultimately hitting its lowest in 2022 of 7.2%. The government has renewed its efforts to revive the sector to grow its contribution to GDP to 20% by 2030. Asset tangibility is a significant determinant of how counterparties and external financiers value a firm and hence turn around its fortunes. This study applied Dynamic Unbalanced Panel analysis techniques using Secondary data for 10-year period (2010 - 2019) with the study population comprising of 9 listed firms. A census of the firms was done and resulted to 86 observations. Focus was on asset tangibility moderated by economic growth rate and earnings volatility on firm value which was proxied by Tobin’s Q and EVA. Pecking order guided the study. Longitudinal research design was used as it is appropriate when dealing with panel data. STATA version 15 was used for analysis. Model estimation followed a two Step System GMM testing the study hypotheses at 5 % significance level. Pearson correlation coefficient was used to show the strength and direction of association among the study variables. ATNG was positively correlated with Tobin Q (r = 0.4331) and LnEVA (r = 0.3683). The regression weights were also positive and significant. The study therefore concluded that asset tangibility is imperative as it directly determines the financial burden firms face in their operations and recommended that the managers of manufacturing firms need to consider project financing to limit exposure to credit risk. Future studies can consider a balanced panel analysis and other panel data econometric techniques. Keywords: Asset tangibility, Firm Value, Financial Performance, Manufacturing firms.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72918789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The3listed firms3in Kenya have been experiencing declining and inconsistent performance in the recent years. The study sought to3establish effect of working3capital management3on financial performance of3agricultural firms3listed on Nairobi Securities Exchange. Specifically, study established the influence of accounts receivable collection period on5financial performance; determined5the effect of creditors5payment period5on financial performance; established3effect of operating cash3flow on3financial performance; and determined5effect of inventory5turnover on3financial performance and establish the controlling effect of firm size on the relationship between working capital and financial performance of agricultural firms listed on Nairobi Securities Exchange. The study3would be important for policy, practice and theory. The study3was based on3agency theory, transaction cost3theory, Miller-Orr Model and Baumol’s Model which formed the theoretical basis for this research. This research adopted a descriptive research and correlational research designs. This study’s 5target population comprised seven agricultural5firms listed on the NSE sampling seven5agricultural firms’ listed5on the NSE between 2016 and 2022 using a census survey. Data was obtained from secondary sources for a period between 2016 and 2022. Panel regression, descriptive and correlation statistics were used for analysis. The study established a negative correlation between accounts receivable collection period and financial performance. The study also revealed that creditor’s payment period had a positive but insignificant relationship with financial performance of the sampled firms. Moreover, there was a positive significant relationship between cash flows and financial performance. This study, therefore, concluded that there exists a positive significant relationship between cash flows and financial performance of agricultural3firms listed on Nairobi Securities Exchange. This study, therefore, concluded that accounts receivable collection period has a significant negative relationship with financial performance of agricultural3firms listed on Nairobi Securities Exchange. The study recommends that agricultural3firms listed on Nairobi Securities Exchange reduce their accounts receivable collection period; increase their operating cash flows; and reduce their inventory turnover period for increased financial performance. Keywords: Capital management, accounts receivable collection period, creditors’ payment period, operating cash5flows, inventory turnover period, firm size5 Financial Performance
{"title":"Working Capital Management and Financial Performance of Agricultural Firms Listed on Nairobi Securities Exchange, Kenya","authors":"Lucy Githiga","doi":"10.53819/81018102t4127","DOIUrl":"https://doi.org/10.53819/81018102t4127","url":null,"abstract":"The3listed firms3in Kenya have been experiencing declining and inconsistent performance in the recent years. The study sought to3establish effect of working3capital management3on financial performance of3agricultural firms3listed on Nairobi Securities Exchange. Specifically, study established the influence of accounts receivable collection period on5financial performance; determined5the effect of creditors5payment period5on financial performance; established3effect of operating cash3flow on3financial performance; and determined5effect of inventory5turnover on3financial performance and establish the controlling effect of firm size on the relationship between working capital and financial performance of agricultural firms listed on Nairobi Securities Exchange. The study3would be important for policy, practice and theory. The study3was based on3agency theory, transaction cost3theory, Miller-Orr Model and Baumol’s Model which formed the theoretical basis for this research. This research adopted a descriptive research and correlational research designs. This study’s 5target population comprised seven agricultural5firms listed on the NSE sampling seven5agricultural firms’ listed5on the NSE between 2016 and 2022 using a census survey. Data was obtained from secondary sources for a period between 2016 and 2022. Panel regression, descriptive and correlation statistics were used for analysis. The study established a negative correlation between accounts receivable collection period and financial performance. The study also revealed that creditor’s payment period had a positive but insignificant relationship with financial performance of the sampled firms. Moreover, there was a positive significant relationship between cash flows and financial performance. This study, therefore, concluded that there exists a positive significant relationship between cash flows and financial performance of agricultural3firms listed on Nairobi Securities Exchange. This study, therefore, concluded that accounts receivable collection period has a significant negative relationship with financial performance of agricultural3firms listed on Nairobi Securities Exchange. The study recommends that agricultural3firms listed on Nairobi Securities Exchange reduce their accounts receivable collection period; increase their operating cash flows; and reduce their inventory turnover period for increased financial performance. Keywords: Capital management, accounts receivable collection period, creditors’ payment period, operating cash5flows, inventory turnover period, firm size5 Financial Performance","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80905798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-28DOI: 10.11648/j.jfa.20231102.11
Ojianwuna Chukwuekwu
: The objective of this research was to examine the influence of intellectual capital IC) and its components on corporate sustainability growth in firms listed in Nigerian stock Exchange. Furthermore, this paper aimed at determining the constituent of the intellectual capital that has more predictive ability on business sustainable growth in Nigeria. A sample size of 10 listed consumer goods firms over a period of ten years (2011-2020) was used as sample size for this study. Regression analysis techniques was used to investigate the effect of Intellectula Capital and its components on business sustainability growth. Results from the analyses revealed that intellectual capital (IC) as proxied by the M-VAIC model establishes a significant influence on corporate sustainable growth, (AdjR 2 =0.128, F-Stat =1.6308; p-value = 0.038). Notably, the findings also showed that almost all the independent variables namely, Physical Capital, Human Capital, Structural Capital and Relational Capital exert significant effect in predicting corporate sustainable growth. Furthermore, the results revealed that physical and human capital are the major components of IC that exert powerful influence on corporate sustainable growth. The study concludes that the overall intellectual capital components play an essential role in driving the listed consumer goods in Nigeria in the wheel of sustainable growth.
{"title":"Intellectual Capital and Corporate Sustainability Growth in Firms Listed in Nigerian Stock Exchange","authors":"Ojianwuna Chukwuekwu","doi":"10.11648/j.jfa.20231102.11","DOIUrl":"https://doi.org/10.11648/j.jfa.20231102.11","url":null,"abstract":": The objective of this research was to examine the influence of intellectual capital IC) and its components on corporate sustainability growth in firms listed in Nigerian stock Exchange. Furthermore, this paper aimed at determining the constituent of the intellectual capital that has more predictive ability on business sustainable growth in Nigeria. A sample size of 10 listed consumer goods firms over a period of ten years (2011-2020) was used as sample size for this study. Regression analysis techniques was used to investigate the effect of Intellectula Capital and its components on business sustainability growth. Results from the analyses revealed that intellectual capital (IC) as proxied by the M-VAIC model establishes a significant influence on corporate sustainable growth, (AdjR 2 =0.128, F-Stat =1.6308; p-value = 0.038). Notably, the findings also showed that almost all the independent variables namely, Physical Capital, Human Capital, Structural Capital and Relational Capital exert significant effect in predicting corporate sustainable growth. Furthermore, the results revealed that physical and human capital are the major components of IC that exert powerful influence on corporate sustainable growth. The study concludes that the overall intellectual capital components play an essential role in driving the listed consumer goods in Nigeria in the wheel of sustainable growth.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90226757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-03-16DOI: 10.11648/j.jfa.20231101.14
Akhmadi Akhmadi
: This study aims to determine effect of capital structure and profitability on dividend policy by including firm size as a moderating variable. The samples in this study were 26 companies from 65 Basic Industrial and Chemical Manufacturing Sector Companies listed on the Indonesia Stock Exchange in 2011-2019, which were determined by purposive technique. The results showed that firm size is a variable that determines the strengthening and weakening of the relationship of capital structure with dividend policy also between profitability with dividend policy. Increasing firm size or increasing company assets do not provide incentives to increase the level of company profitability as measured by return on equity. Likewise, an increase in company assets does not provide incentives to increase dividend ratios, as an estimate of an increase in company income due to increased production capacity and company sales capacity. The larger firm size provides an incentive to increase the debt ratio because of the increasing need for funding to increase its investment in long-term assets. An increase in company size is also an indication for an increase in dividend ratios due to the estimated increase in company profits due to increased company revenue. Therefore, the determinants of capital structure and dividend policy in emerging markets such as the Indonesian market share the same set of suggested factors with the developed markets.
{"title":"Firm Size Moderate Relationship Between Capital Structure and Profitability with Dividend Policy: An Empirical Evidence from Indonesian Data","authors":"Akhmadi Akhmadi","doi":"10.11648/j.jfa.20231101.14","DOIUrl":"https://doi.org/10.11648/j.jfa.20231101.14","url":null,"abstract":": This study aims to determine effect of capital structure and profitability on dividend policy by including firm size as a moderating variable. The samples in this study were 26 companies from 65 Basic Industrial and Chemical Manufacturing Sector Companies listed on the Indonesia Stock Exchange in 2011-2019, which were determined by purposive technique. The results showed that firm size is a variable that determines the strengthening and weakening of the relationship of capital structure with dividend policy also between profitability with dividend policy. Increasing firm size or increasing company assets do not provide incentives to increase the level of company profitability as measured by return on equity. Likewise, an increase in company assets does not provide incentives to increase dividend ratios, as an estimate of an increase in company income due to increased production capacity and company sales capacity. The larger firm size provides an incentive to increase the debt ratio because of the increasing need for funding to increase its investment in long-term assets. An increase in company size is also an indication for an increase in dividend ratios due to the estimated increase in company profits due to increased company revenue. Therefore, the determinants of capital structure and dividend policy in emerging markets such as the Indonesian market share the same set of suggested factors with the developed markets.","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81124857","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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