Efobi,, Uchenna R and Voufo, B.T. and Beecroft, I. and Okougbo, P. (2016) On the solvency of firms: Can government's intervention reduce external financing of firms' workingcapital in Nigeria? In: Advanced Series in Management. Elsevier.
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Abstract
This chapter intends to examine the relationship between government incentives and the mode of firms' finance oftheir operation in Nigeria. Specifically, it does relate the solvency of the firm with the quality of their financing decisions andobserved if government incentives such as creation of export processing zones and industrial parks will affect the firm'sdecision of depending on external versus internal financing. Methodology/approach - The results presented in this chapterare based on analysis of a firm-level data taken from the 2014 firm-level survey of the World Bank's Enterprise Surveyproject for Nigeria. Different estimation techniques are applied for robustness and sensitivity. They include both theparametric and nonparametric regression approach. Findings - The robust estimations show that firms that benefit from thegovernment incentives tend to use more of internal funding to finance their operation unlike firms that are non-beneficiaries.In addition smaller firms are going to benefit more from the incentives than older firms, and less profitable firms are alsogoing to use more of internal financing if they benefit from government incentives. Practical implications - This chapter willbe helpful for both research and teaching for undergraduate and post-graduate students. Importantly, its analysis and resultwill be useful for policy makers and their allies. Originality/value - This chapter discusses solvency issues by considering thefinancing decision of firms, which is an important aspect in the going concern of firms. Copyright © 2016 by Emerald GroupPublishing Limited.
| Item Type: | Book Section |
|---|---|
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | Mrs Hannah Akinwumi |
| Date Deposited: | 27 Jun 2021 02:44 |
| Last Modified: | 27 Jun 2021 02:44 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/15049 |
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