Open Access Original Research Article

Economic Environment of Small and Medium Scale Enterprises: Implications on Economic Growth in Nigeria

Lilian Orogbu, Chinedu Uzochukwu Onyeizugbe, Ewans Chukwuma

Journal of Economics, Management and Trade, Page 1-12
DOI: 10.9734/JEMT/2017/36349

The complexities arising from the fluctuations of economic environmental factors have constituted core difficulties encumbering the operations of small and medium scale enterprises in Nigeria. This led to collapse of businesses, loss of jobs and unprecedented decline on their performance which is a cog on the wheel of economic growth. Therefore, this study titled economic environment of small and medium scale enterprises and its implications on economic growth in Nigeria was an attempt to explore the implications of economic environment of small and medium scale enterprises on economic development. The study employed a quantitative design with secondary data on SMEs performance, government tax revenue, exchange rate, interest rate and inflation rate, respectively. Ordinary Least Square (OLS) formed the basis for the estimation. The study found that exchange rate, inflation rate, interest rate and government tax revenue have negative relationship with SMEs performance. The implication of this negative relationship is that consistent increase in government tax revenue, exchange rate, inflation rate and interest rate have propulsive affect on performance of SMEs in Nigeria, vice versa and recommended that the federal government should come up with economic policy and regulatory framework that will maintain fixed exchange rate, interest rate and low inflation because stabilizing these economic variables would drive the operations of small and medium enterprises, as they will innovate, create and invent new things, products and services to stimulate productivity, which in turn, create resource-based economy.

Open Access Original Research Article

Industrial Sector Growth and Public Infrastructure Capital in Nigeria

Jonah Akekere, Jonathan O. Oniore, Akatugba D. Oghenebrume, Ekainsai Z. Stephen

Journal of Economics, Management and Trade, Page 1-12
DOI: 10.9734/JEMT/2017/37144

Policy makers in Nigeria tend to regard public infrastructure as the key to long-run industrial and economic growth. But unfortunately, public infrastructure in Nigeria is typically in a fairly poor condition. Poor infrastructure reduces the profitability of modern manufacturing industrial sector and may therefore inhibit industrialization. Road systems are neglected, public transport and telecommunication systems are unreliable, power supply frequently breaks down, hence the study examined the link between public infrastructure capital and industrial sector growth and through that assessed the impact of public infrastructure capital on industrial sector growth in Nigeria. The Ordinary Least Squares (OLS) and the Generalized Method of Moments (GMM) methods were used for the analysis. The empirical results indicated that on one hand, public capital infrastructure captured by infrastructure development index, human capital development measured by human development index and inflation rate are negatively related to industrial sector growth in both the OLS and GMM frameworks. Broad money supply and exchange rate on the other hand, were found to have a positive relationship with industrial sector growth in both the OLS and GMM frameworks. It is thus concluded that for Nigeria, infrastructure exerts a negative impact on industrial sector growth. This outcome suggests that the level of access to infrastructure or its quality did not affect industrial growth. It is therefore recommended that policy direction in Nigeria should focus on reversing pervasive infrastructure deficit, in ways that enable economic growth and development. Specifically, government should look for other stable sources of financing infrastructures in Nigeria like the recent sukuk issue targeted at infrastructures development and financial inclusion.

Open Access Original Research Article

The Magic Number Seven for Companies in Mature Markets

Peter Stallinga

Journal of Economics, Management and Trade, Page 1-10
DOI: 10.9734/JEMT/2017/36828

An economy is a dynamic system where new companies are constantly created, divisions and mergers take place and bankruptcies occur. A theoretical question arises if there is some kind of ’optimum’ or ’final’ steady-state distribution of company sizes or is it all based on random fluctuations? It is shown here that in a closed fixed-size market with only non- diversifying mergers, the stable number of companies is about seven. This is based on simple mathematical relations between clients and product prices. The implication is that when crystallized markets merge into a new common market, as for instance the European Union, many mergers will take place to reach a new equilibrium with seven companies. However, once the new combined market approaches this optimum, all internal incentives for innovation and price lowering are gone from the market.

Open Access Original Research Article

Treasury Single Accounting (TSA) and Public Sector Accountability in Nigeria

Nwaorgu Innocent Augustine, Ezenwaka Francis Abumchukwu, Onuorah Joshua

Journal of Economics, Management and Trade, Page 1-8
DOI: 10.9734/JEMT/2017/37780

The study ascertained effect of treasury single account and accountability in the Nigeria Public Sector. Two specific objectives guided the study, while two research questions was raised and two hypotheses were formulated in line with the specific objectives and tested at 0.05 level of significance. A descriptive survey research design was used. The population of this study consisted of 600 staff of the four federal health tertiary institutions drawn from Account Departments and simple size of 250 Account Departments staffs were selected using the proportionate random sampling technique. A structured 25-item validated questionnaire was used for data collection. The reliability of the instrument was ensured using pilot test technique, which was analyzed using Cronbach alpha method and yielded an overall reliability co-efficient of 0.85 with the aid of statistical package for social science (SPSS) 20.0. Data were analyzed using descriptive statistics and one regression models for the research questions and for test of hypotheses at 0.05 level of significance. Findings show that adaptation of a treasury single account and accountability (TSA) in the Nigeria Public Sector is capable of plugging financial loopholes, promoting transparency and accountability in Federal Health Tertiary Institutions in South-East Nigeria. The study concluded that TSA policy would go a long way in blocking the indentified financial leakages in revenue generation and promote transparency and accountability in the public sectors financial system if it is fully implemented. The study therefore recommended among others, that government should engage in massive public enlightenment about the important of the TSA policy.

Open Access Original Research Article

Impact of Monetary Policy on Stock Market Prices in Nigeria

Oniore O. Jonathan, Akatugba D. Oghenebrume

Journal of Economics, Management and Trade, Page 1-11
DOI: 10.9734/JEMT/2017/37882

The paper investigated the relationship between monetary policy and stock market prices in Nigeria and through assess whether monetary policy influences stock market prices, for the period 1985 to 2015. The Dynamic and Fully Modified Ordinary Least Squares (DOLS & FMOLS) techniques were used for the analysis, while the error correction model (ECM) framework was deployed for robustness. A long-run equilibrium relationship was found among the variables used.  The empirical results indicated that monetary policy rate, credit to private sector, exchange rate and broad money supply are positively related to stock market prices captured by the all share index in either the DOLS or FMOLS frameworks. Exchange rate and broad money supply were found to have statistically significant impact on stock market prices.  The estimated ECM equations showed that the short-run determinants of stock prices are largely from are credit to private sector, exchange rate and one period lagged exchange rate; while monetary policy rate and broad money supply have a negative relationship with stock market prices in the short-run. It is therefore evident from the results of this study that some monetary policy instruments can be a better predictor of stock market prices in Nigeria. In the light of this, it is recommended that monetary authorities should be cautious enough to avoid discretionary policies that might hike the rate of interest; otherwise the flow of fund to the market will be derailed. Also, the government should fine turned the exchange rate policy and institute a consistent policy plan to mobilize surplus funds from abroad, which would be injected into the capital market for significant development