Chinedu B. Ezirim

The Political Economy of Multinational Conglomerates in Nigeria

Abstract The paper analyzes the operations of the multinational conglomerates so as to determine the impact of their operations on the Nigerian economy, and especially on the manufacturing sector. It also investigated the possible problems hindering their operations. In an attempt to accomplish these objectives, we employed both survey and investigative research methods using regression modeling and estimation. The analysis of the secondary evidence indicates that, generally, the investment activities of conglomerates are found to positively and significantly relate to the output performance of the manufacturing sector of the Nigerian economy. The primary data analysis confirms this finding. On the other hand, they are seen to exploit natural resources and the workforce to the detriment of the country, and by repatriating all available funds and profits to overseas economies, the economy is starved of needed funds. However, their positive contributions to the Nigerian economy were seen to outweigh their negative contributions. This is particularly true of the manufacturing sector. Two perennial problems confronting the conglomerates in their investment activities relate to environmental hostilities and communal disturbances/social upheavals. Other problems relate to political risks, instability and impasse, and unstable economic climate.

The Nigerian Financial Superstructure, Financial Intermediation, and Environmental Factors: Issues, Empirical Evidence, and Managerial Implications

ABSTRACT The paper empirically investigates the extent to which environmental factors affect the intermediation performance of the financial superstructure in Nigeria. A number of intermediation-environmental models were constructed and estimated against annual Nigerian data from 1970 to 2000. Among the various environments of financial intermediation, the socio-political environment, the regulatory environment, and the eco-financial environment exert very great influences on the operations of the financial superstructure. This is based on the evidence from the results, which revealed the socio-political index, regulatory index, and foreign exchange market variables as the most critical predictors of the financial intermediation-output-related index. Other factors such as inflation, taxation, financial market imperfection, and the growth rate of the economy appear not to exert statistically significant effects on the intermediation operations of the financial superstructure. Generally, the utility of the specified models was satisfied as indicated by the results of the global statistics.

Intermediation Behavior of the Financial Superstructure in Response to Environmental Stimuli: Theory, Issues and Further Empirical Evidence from Nigeria

ABSTRACT This paper is an empirical extension aimed at investigating the relationships between the indicators of the financial superstructure and its intermediation environments; and especially how the former responds to the effects of the latter. Intermediation-environmental models patterned after multivariate regression, causality, and partial adjustment models of both linear and log-linear formulations were estimated and analyzed. The results reveal that three environments: socio-political, regulatory, and international finance-exerted significant effects on the intermediation function of the superstructure. Previous intermediation successes ginger up current performance. In the long run, the effects of the environmental factors on the intermediation function of the superstructure, in whatever direction, more than quadruples. In any given year, the Nigerian financial superstructure attains only about 21.9% of desired (optimal) FIR. Given this, it would take about 4-1/2 years for it to adjust its intermediation operations (FIR), in light of the effects of environmental factors, to optimal levels in order to significantly impact the economy as desired. Some consistent behavioral traits were identified from the results to include: the precepts of potential maximization, profit maximization, accommodation principles, survival and cost-minimization principles, and the neutrality axiom.