This study sets out to appraise the financial and operating performance of some privatized enterprises in Nigeria.The matched pair results though mixed,do provide empirical support that privatization is associated with improved financial and operating performance of firms. It thus validates the theoretical preposition that privatization might improve efficiency, as is suggested both by the property rights and public choice literature. The results show significant improvement in profitability after divestiture in some of the selected firms.For instance, the mean return on sales goes from 3.50 percent before privatization to 9.80 percent at Afribank. The same significant improvement was recorded in Ashaka cement, Allco insurance, Benue cement, Flour mills and Okomu palm in the agro-allied sub sector.On operating efficiency,all the sampled firms witnessed an increase at 5 percent level except for Flour Mills and Allied Bank plc.The results from the analysis for other performance indicators were also mixed.
The concern of this book is fourfold: firstly, to analyse the impact of privatization on firms performance. Secondly, to understand the determinants of the post-privatization performance behaviour,that is, why and how privatization works. In third place, to investigate the change in performance behaviour of firms that make the transition from private closely held (family)ownership to public ownership, through initial public offerings (IPOs)or direct sales (DSs). Lastly, to understand the causes that may explain a certain performance behaviour of those family companies after going public.
Survival of firms depends largely on improved performance but several factors both internal and external have culminated to influence the performance of firms. External factors include the poor macroeconomic and political environment of doing business while internal factors include poor corporate governance, lack of adequate capital and poor capital structure choice etc. Capital structures remain a strong factor driving the performance of firms; several firms had collapsed due to poor financial structure decisions. The results of the study are deemed to benefit the following primary users; external investors and shareholders who will be able to know how the capital structure of firms affects their performance and guide in making investment decisions. Professional manager would be better guided on how to achieve the company’s objectives. Lenders may find the results useful in evaluating the firms’ performance before giving loans and academicians will see new empirical evidence particularly in the finance literature emanating from an emerging economy like Nigeria.
Does ownership matter? This book titled ‘Privatization and Financial Performance: An Indian Experience’ tries to answer this question by analysing performance of Indian Public Sector Units, privatized (disinvested) by Government of India. Study found that average performance is improved but performance improvement is only relative, not statistically significant. It is expected that the results of this study will be useful to many sections in the society like disinvested firms, policy makers, academic world and in particular to Government of India. Being a book which covers theoretical aspects of Indian privatization, method of disinvestment and its impacts in performance; this book will be helpful to researchers, academicians and policy makers as a reference book.
Around the world, the implementation of privatization has varied in policy, polity, strategy and method. In Nigeria, the Nigerian privatization program has always been centralized under a federal policy and polity without an effective interface between the Center and the states. The Federal Government’s resolve to disengage from State-Owned Enterprises did not always meet similar interest on the part of States and Local Governments. As a consequence, in Nigeria, most of Sub-national Governments have adopted a substitute approach which entails the transfer of their stakes to their respective Sub-national investment companies. These companies strive to promote those stakes beyond what is expected from other ordinary shareholders, leading sometimes to unresolved board conflicts. We postulated that the more stakes are held by Sub-national investment companies in privatized firms, the more unresolved board conflicts are likely to occur in these privatized firms.
This study examined the impact of corporate governance on the performance of non financial firms in Nigeria stock Exchange. This was with a view to determining the relationship between the corporate governance variables and firm performance. Data on Corporate governance variables and firm performance were collected and analysis using panel data analysis to determine the influence of corporate governance on the performance of firms in Nigeria Stock Exchange worst affected by the last financial crisis. And particularly it highlighted the contrasting behavior of non-financial firms of Nigerian Stock Exchange with or without a Cronyman.
This book explores whether board political connection is important to firms performance in Nigeria which has a growing financial market. The study also provides a descriptive analysis of firms whose board members are politically connected in the context of Nigeria, with a special focus on their corporate governance features. Secondary source of data which consist of a total of thirty listed firms in the Nigerian Stock Exchange was used. The research data were analysed based on regression analysis using ordinary least square method and correlation analysis. The empirical findings revealed that there is no significant positive relationship between board composition, board political connection and firm performance. There is a negative relationship between board size and firm performance. Therefore, managers should lay appropriate policy in order to maximize firm performance as well as organizing the firm’s resources.
According to the study privatization has significant negative impact on firms profitability but positive impact on firms’ efficiency in terms of net income, sales and cost efficiency. Liquidity and capital spending are show an increase but not significantly. Total debts and employment show reduction after privatization. From post-privatization ownership identities, foreign ownership has large negative impact on firms’ profitability but large positive impact on efficiency and liquidity than domestic ownership. And also foreign ownership largely increase capital spending and largely reduce financial leverage and employment than domestic ownership. Finally, the study suggested that the privatized enterprises further focus on employee training, cost control and employ relevant technology to improve their financial and operating performance and further reform measures should be initiated to import new machinery,equipments’ and raw materials for companies their machines’ and equipments obsolete and dysfunctional and import raw materials and also effort should be directed to establish and develop domestic financial market to attract foreign and domestic private investors.
Foreign Direct Investment (FDI) is seen as an important channel for obtaining access to resources for development and the emerging positive attitudes towards FDI are reflected in policy changes that increasingly facilitates FDI. Empirical studies on the impact of FDI in most developing countries like Nigeria largely dwelt at macro level particularly on economic growth, neglecting the micro level. Thus, this monograph looked at the impact of FDI on the performance of manufacturing firms in developing countries particularly, Nigeria. Time series data between 1989 and 2008 were employed and in the analysis Vector Error Correction was used for test of causality and the OLS for evaluating the relationship between FDI and Manufacturing firms. The findings revealed that causality between FDI and Manufacturing firms is bidirectional. Manufacturing Index causes growth in FDI, growth in FDI inflow causes Capacity Utilization and increase in Manufacturing Value Added. This analysis help in showing that developing countries has the needed resources and the market for manufacturing firms to thrive. Hence, the need for efficient FDI into these regions.
The recent global crisis which suddenly results to Nigerian stock market crash revealed some peculiarities of Nigerian firms. Some firms in Nigeria are performing but their stock prices are not increasing while some firms are at the brink of collapse but their stock prices are increasing. Thus, this study examines the relationship between firm performance and stock prices in Nigeria. The study covered the period of 2005 to 2009. This period is the period of stock boom and also marked the period of stock market crash as a result of global financial meltdown. The study is a panel study. A total of 140 firms were sampled from 216 firms listed on the Nigerian Stock Exchange (NSE). Data were collected from secondary source. These data were divided into four strata comprising the most performing stock, the least performing stock, most performing firms and the least performing firms. Each stratum contains 35 firms with characteristic of most performing stock, most performing firms, least performing stock and least performing firms. The study found that, relationship exists between selected firm performance parameters and stock price.
The study assessed technological capability and innovations among small and medium scale metal fabricating firms in southwestern Nigeria, and examined the factors that influenced the accumulation of these technological capabilities. It also assessed the effect of these capabilities on the performance of the fabricating firms. This was with a view to providing data for developing appropriate policy that will promote technology development in the sector. The study was carried out using a sample of 200 metal fabricating firms that are registered with the Manufacturers Association of Nigeria and the Ministry of Commerce and Industry. The results of the study however showed a variation in the Technological Capability Index (TCI) scores of firms in relation to the size of the firms. The study concluded that only the medium scale metal fabricating firms possessed high technological capability in the areas of investment and production activities, and product innovation. Furthermore, some factors such as founders’ work experience and in-house training for technical staff also influenced the technological capabilities of these metal fabricating firms.
This book examines the application of Contemporary Marketing Strategies and their impact on agricultural marketing firms performance in South-West Nigeria. The study was carried out on established conceptualised Contemporary Marketing practice comprising of four different approaches - Transaction, Database, Analysis Interactive Mix and Network Marketing. The general objective of the study was to examine the application/adoption of Contemporary Marketing Strategies and the Performance of agricultural Marketing firms in Nigeria’s buyer-seller relationships. Data for this research were obtained from both primary and secondary sources. Relevant published and unpublished literature provided the secondary data. The primary data were obtained through structured questionnaires (administered to sampled agricultural marketing firms managers involved in three major divisions of Industrial, Food and other Agro sectors in South-Western, Nigeria). One thousand one hundred and ten (1,110) copies of the questionnaire were administered, out of which eight hundred and eighteen (818) were collated for the analysis, representing 79 per cent return rate.
It is therefore important to understand how firms financing choice affect their performance. The kernel of this study is to examine the impact of firms’ financing choice on their profitability in Nigeria capturing both the effects of internal and external factors that drive firms’ profitability. The result of the study has many intrinsic values and deemed to benefit the external investors and shareholders who will be able to know how the finance structures affect their performance. Lenders may find the results useful in evaluating the firms’ performance before giving loans and finally, academicians who will see new empirical evidence particularly in the finance literature emanating from an emerging economy like Nigeria.
This book is written as addition effort to providing solution to increasing rates of corporate firms closure and shut down in Nigeria,especially in the last one decade.It is also designed to enable Nigerians,and,indeed African corporate firms resource managers identify and conform with global best practices in contemporary governance mechanisms.The book emphasizes the need for regulatory bodies and authorities to encourage, or even compel, firms managers to maintain a reasonable Board of directors size, as overly large Board may hinder effective performance of corporate firms.Again,the belief that external Board members may provide significant moderating influence on internal Board members was found not to be true and accurate, based on the performance indicators of firms studied in Nigeria.This book undoubtedly represents a credible source of information on the subject matter to Corporate firms managers, researchers,policy makers,including government diktats in Nigeria,Africa,and other parts of the world.
Privatization of state owned enterprises (SOEs) just like the case of Benue cement coment company plc has become a key component of the structural reforms process and globalization strategy in many economic. public expenditures to the up keep of state owned enterprises in most of the countries of the world and especially Nigeria has been observed to be less productive since they have failed to yield a coresponding positives reform both directly and indirectly.Due to these waste calls of handing over to the private sector the area they seen to have comparative advantage are continuously made, hence the issue of privatization which has become the order of the day.privatization has been a major reform option for government world wide. Although it includes a range of different activities, this book seek to review privatization from the perspectives of management effectiveness and high productivity. This book will be of benefit to policy makers, Student of Social and management science.