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Macroeconomic Variables and Corporate Resilience: Empirical Evidence from Quoted Commercial Banks in Nigeria

Orlu, Lucky, Amini, Maton-Awaji Clifford & Amadi, Celestine Rose

Abstract

The study investigated the effects of macroeconomic variables and quoted commercial banks resilience in Nigeria. The study adopted ex-post facto research design. Stratified and random sampling methods were used to select 13 out of the 22 quoted existing commercial banks. Secondary data were obtained from the Central Bank of Nigeria publications and financial statement of the quoted commercial banks. Commercial bank resilience (variation in capital adequacy ratio) modeled as the function of interest rate, real gross domestic products, exchange rate, inflation rate and money supply. A critical analysis of the financial statements of the commercial banks over a period of 10 years (2011- 2020) was conducted. Diagnostic tests were conducted using Hausman specification test. Fixed effects estimator was employed and regression analysis to test the formulated hypotheses. The study found that 51.6 percent variations in commercial banks resilience can be attributed to the influence of economic variables while the remaining 48.9 percent variations in the dependent variable were caused by other factors not included in this model. The p-value of the F-statistic found that simultaneous combinations of the proxies of the macroeconomic indicators significantly influence commercial banks resilience since it is less than the 0.05 significant level adopted for this study. the study conclude that the variables have positive but no significant effect on commercial banks resilience within the periods covered in the study.it therefore recommend that . Government should ensure that financial market is properly managed in a manner that it will enhance commercial bank resilience. Government should direct its financial market regulators to ensure proper policies that will enhance effective transmission of macroeconomic policies that impact positive and significantly to commercial banks resilience and the need for efficient management of exchange, inflation and interest rates in such a way to

Keywords

Macroeconomic VariablesCorporate ResilienceQuoted Commercial BanksNigeria

References

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