IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 6 NO. 2 2020

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An Econometric Investigation of Human Capital Investment and the Nigerian Banking Sector Performance

Ekpete, Marshall Simon (Ph.D) & Iyo, Ipeghan (Ph.D) AND Ekpete, Kingsley Simon

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Abstract

The study is an econometric investigation of the relationship between human capital investment and performance of the Nigerian Banking Sector. It utilizes panel data drawn from Annual Financial Statements of thirteen (13) listed commercial Banks covering from 2007-2018. The methods of analysis employed are unit root test, co-integration test, Vector Error Correction model, Granger Causality test and Ordinary Least Square (OLS) to estimate data. The estimation results revealed that a positive and significant relationship exist between total customers deposit ratio and return on asset. Also positive and significant relationship exists among total loans and advance ratio and return on asset. Finally, total asset ratio has a negative and insignificant relationship with return on asset. The study concludes that bank should developed and trained skilled manpower to achieve its goal of profitability. We recommend that human capital investment cost should be recognized as an expenditure item in the financial statement of firms rather being merged with administrative expenses.

Human capital investment; Banking sector performance; Personnel expenditure;

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