The Ethiopian Journal of Business and Economics

Examining the Influence of Financial Report Quality on Shaping the Capital Structure Decision Process of Brewery Companies in Nigeria

Ayoola Azeez Olaoye — Fri, 18 Oct 2024 00:00:00 +0000

This study investigated how financial report quality shapes the capital structure decision-making in listed brewery companies, focusing on Nigeria. The research analyzed secondary data from the annual reports of six selected breweries between 2012 and 2023, resulting in a total of sixty observations. Using an ex post facto research approach, the study applied descriptive statistics and panel regression methods comprising fixed effects, and pooled least squares and after the selection tests, the research eventually considered Pooled Ordinary Least Squares the best data estimator. The results revealed that asset tangibility, high debt performance, and capital adequacy significantly influence the capital mix decisions in these companies. The research also highlighted that asset tangibility strengthens their asset base. The study concluded that the quality of financial reports, as indicated by key financial indicators like capital adequacy, debt performance, and tangible asset investment, plays a crucial role in shaping capital structure strategies. The study further suggested diverse financing options and effective asset and risk management for brewery firms to minimize risks associated with high leverage.

Modeling and Forecasting Volatility of Food and Non-food Price in Ethiopia: A GARCH Modelling Approach

Adamu Megersa — Tue, 22 Oct 2024 00:00:00 +0000

This study aimed to model and forecast price volatility of food and nonfood prices in Ethiopia using the Generalized Autoregressive Conditional Heteroscedasticity Model. To achieve the objective, the study employs monthly data on monthly prices of food and non-food inflation from December 2000 to September 2020 collected from the Central Statistical Agency of Ethiopia. It finds that the long-run result showed that a 1% increase in the Food Price Index is associated with a 42.84% increase in the consumer price index keeping other variables constant. Therefore, stabilization policies to dampen high volatilities and a prudent fiscal policy as a means of avoiding sources of subgroup commodities imbalance are quite apparent to reduce the rapidly rising food prices and non-food prices in the country.

Determinants of Tax Performance in Nigeria: An ARDL Analysis of Economic, International, and Financial Factors

Yinusa Olumuyiwa, Ariyibi Mayowa, Odunsi Oluwasegun — Tue, 22 Oct 2024 00:00:00 +0000

In the Nigerian context the drop-in oil revenue calls for the need to diversify the economy by improving on the non-oil tax revenue generation means to meet up with contemporary challenges. Also, the shortage of tax revenue due to low budgets in developing countries may be a result of public institution's inefficiencies and economic ills. This study investigated the determinants of tax revenue in Nigeria. The secondary data was sourced from the Central Bank statistical bulletin and the World development indicators from the period 1991 to 2022. The study employed the Auto-regressive distributed lag, which helps to determine the short-run and long-run relationship between the dependent variable and independent variables. The finding revealed that the GDP per capita has a positive significant effect on tax revenue while the Inflation rate has a negative significant effect on tax revenue both under the economic factors. The international factors of foreign direct investment have a positive significant effect on tax revenue while the financial factor of the loan-to-deposit ratio has a negative significant effect on tax revenue. It therefore concluded that economic factors, international factors, and financial factors selected in this paper, have the peculiarity to improve the tax performance and revenue in Nigeria. Based on this findings it is recommended that the government should enhance fiscal policies through leveraging on the positive impacts of GDP per capita and foreign direct Investment on tax revenue. The challenges posed by inflation and loan-to-deposit ratio could affect the financial stability and intermediation prowess of the institution which would have a long-run impact on the country's tax revenue.

The Mediating Role of Employees’ Entrepreneurial Intentions in the Relationship between Entrepreneurial Leadership and Business Performance in Small and Medium Manufacturing Enterprises in Addis Ababa

Birhanu Tsegaye, Matiwos Ensermu, Eshetie Berhan — Fri, 25 Oct 2024 00:00:00 +0000

The study empirically investigates the mediating role played by entrepreneurial intentions in the relationship between entrepreneurial leadership and business performance. Simple random sampling technique was employed to select 361 respondents from the target population in the small and medium enterprises and questionnaires were used as a data collection instrument. The study focuses on the often-overlooked dimensions of autonomy and networking within entrepreneurial leadership, seeking to investigate their impact on financial and non-financial performance. By employing a Structural Equation Modeling, the study findings reveal that a significant positive influence of autonomy and networking on financial performance. However, the study does not find a significant mediating role of entrepreneurial intentions in the relationship between entrepreneurial leadership and business performance. The findings will help policymakers and small and medium enterprises leaders with actionable strategies to encourage the promotion of entrepreneurial leadership practices that empower employees and facilitate valuable connections.