Macroeconomic Variables and Value Creation in the Nigerian Quoted Companies

摘要

This study uses 1,425 observations, relating to firm level and time series data sets, to examine the effect of macroeconomic variables on the economic value created by the Nigerian quoted companies. The data described macroeconomic variables such as inflation (INF), interest rates (INT), capital expenditure ratio of government (CAR) foreign exchange rates (FRXG), gross domestic product (GDPG) and the developments in the capital (CMKG) and labour market (LBMG) and the economic value added (EVA) by 186 purposively selected quoted companies for the years 2001-2012. To allow for comparison, the companies were categorized into two sub-sectors: manufacturing (715 observations) and services (710 observations). The study uses descriptive and inferential statistical tools such as mean, standard deviation, correlation, pooled ordinary least square (OLS) regression and generalized method of moments (GMM) techniques to analyze data. The study found that EVA followed an autoregressive function after one period and lagged EVA was included in model. Due to the problem of heteroskedasticity, Generalized Method of Moment results were relied upon and significant (positive and negative) impact of CAR (β = -0.0173, p<0.05), FRXG (β = 0.00857, p < 0.01), INF (β = -0.00896, p < 0.05), INT (β = 0.0262, p < 0.1) and LBMG (β = 0.00158, p < 0.01) on EVA was found, for all the companies. We concluded that value creation, measured by EVA, is a function of prior year EVA and that inflation rate, interest rate, foreign exchange rate, capital expenditure ratio and the development in labour market were important macroeconomic factors that should be improved upon if quoted companies were to optimally create economic value in Nigeria.