Impact of Digital Economy and Value Creation on the
Profitability of Multinational Enterprises in Nigeria

Ovie Ogidiaka; Terzungwe Nyor; Eniola Samuel Agbi; Cletus Alexander
Umerie; Saidu Hamza Danjuma

doi:https://doi.org/10.56201/jafm.v8.no6.2022.pg1.13

📄 Download Paper

Impact of Digital Economy and Value Creation on the Profitability of Multinational Enterprises in Nigeria

Ovie Ogidiaka, Terzungwe Nyor , Eniola Samuel Agbi, Cletus Alexander Umerie, Saidu Hamza Danjuma

Abstract

The study empirically evaluates the impact of broadband penetration and value creation on the profitability of MNEs in Nigeria. The study adopted the survey research design to elicit responses from 1000 Nigerians that were randomly sampled with an e-questionnaire and 152 staff of NCC. The Cronbach Alpha model shows overall reliability of 0.706. The result from the multiple regression from the 1000 Nigerians shows an Adjusted R-square of 0.230 which explains that 23.0% of the variability of profitability is explained by broadband penetration and value creation. The correlation coefficient result shows that there is a significant and moderate relationship between profitability and broadband penetration with a value of 0.414. Similarly, profitability and value creation also show a significant and moderate relationship with a value of 0.359. However, the relationship between value creation and broadband penetration was significant and moderately correlated at 0.346. The Adjusted R-square of 0.040 for the 152 staff of NCC shows that 4.0% of the variability of profitability is explained by broadband penetration and value creation. The correlation coefficient shows that there is a positive but weak relationship between profitability and broadband penetration of 0.111. Also, profitability and value creation have a positive but weak relationship of 0.215. More so, broadband penetration and value creation show a positive but weak relationship of 0.159. The F-statistic value of 4.115 and a P-value of 0.018 indicates that the variables are statistically significant. The study recommended that the Nigerian Communication Commission should develop a national backbone network through which Nigerians can access the internet rather than relying on mobile broadband whose coverage is limited in rural areas.

Keywords

Digital EconomyValue CreationProfitabilityBroadband PenetrationMultinational Enterprises

References

Bukht, R., & Heeks, R. (2017). Defining, conceptualizing, and measuring the digital economy. GDI Development Informatics Working Papers, no. 68. University of Manchester, Manchester. Dahlman, C., Mealy, S., & Wermelinger, M. (2016). Harnessing the digital economy for developing countries, OECD, Paris. http://www.oecd- ilibrary.org/docserver/download/4adffb24-en.pdf e-Conomy Africa (2020). Africa’s $180 billion internet economy future. https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publicat ion_site/publications_listing_page/google-e-conomy Evans, D. (2011). The Internet of Things How the Next Evolution of the Internet Is Changing Everything. Cisco Internet Business Solutions Group (IBSG) 4 -11. https://www.cisco.com/c/dam/en_us/about/ac79/docs/innov/IoT_IBSG_0411FINAL.p df Grigorescu, A., Pelinescu, E., Ion, A., Dutcas, M (2020). Human capital in digital economy: An empirical analysis of Central and Eastern European countries from the European Union. Sustainability 2021, 13, 2020. https://doi.org/10.3390/su13042020 Kim, Y., Kelly, A., Tim, C., Raja, B., & Siddhartha, D. (2010). Building broadband: strategies and policies for the developing world (English). World Bank. McKinsey (2019). Globalization in transition: The future of trade and value chains. https://www.mckinsey.com/featured-insights/innovation-and-growth/globalization- in- transition-the- future-of-trade-and-value-chains. Nagy K., H (2020). Assessing the digital economy aims, frameworks, pilots, results, and lessons. Hanna Journal of Innovation and Entrepreneurship (2020) 9:16. https://doi.org/10.1186/s13731-020-00129-1 Nigerian Investment Promotion Commission (2018). Nigeria’s digital economy to generate $88b by 2021. https://www.nipc.gov.ng/2018/10/10/nigerias-digital-economy-to-generate-88b- by-2021/ Ogidiaka, O., Agbi, S.E., & Lateef, O.M (2022). Impact of transfer pricing on revenue generation and debt profile in Nigeria. Journal of Accounting and Taxation, Vol. 14(2), 112-117. DOI: 10.5897/JAT2021.0459 PwC (2018). Global top 100 companies by market capitalization (31 March update). Available at: https://www.pwc. com/gx/en/audit-services/assets/pdf/global-top-100- companies-2018-report.pdf . The Economist (6 May 2017) ‘The world’s most valuable resource is no longer oil, but data, https://www.economist.com/leaders/2017/05/06/the-worldsmost-valuable-resource-is- no-longer UNCTAD (2019) Digital Economy Report 2019 – Value Creation and Capture: Implications for Developing Countries, New York: United Nations WEF, (2015). Expanding Participation and Boosting Growth: The Infrastructure Needs of the Digital Economy, World Economic Forum, Geneva. www3.weforum.org/docs/WEFUSA_DigitalInfrastructure_Report2015.pdf WEF (2012). Big data, big impact: new possibilities for international development https://www3.weforum.org/docs/WEF_TC_MFS_BigDataBigImpact_Briefing_2012. pdf

Impact of Digital Economy and Value Creation on the Profitability of Multinational Enterprises in Nigeria

Abstract

Keywords

References

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT