Do Macroeconomic Variables Predict Deposit Money Banks’ Performance in Nigeria
International Journal of Accounting, Finance and Risk Management
Volume 5, Issue 3, September 2020, Pages: 118-130
Received: May 25, 2020; Accepted: Jun. 8, 2020; Published: Jun. 16, 2020
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Ejem Chukwu Agwu, Department of Banking and Finance, Abia State University, Uturu, Nigeria
Ogbonna Udochukwu Godfrey, Department of Management Science, Rhema University, Aba, Nigeria
Ogbulu Onyemachi Maxwell, Department of Banking and Finance, Abia State University, Uturu, Nigeria
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This study investigated the relationship between macroeconomic variables and the performance of deposit money banks in Nigeria is incited by the heated arguments of finance and economic researchers’ on whether macroeconomic variables; Gross Domestic Product rate, interest rate, inflation rate, money supply and exchange rate are or not in control of the banks’ management banking sector. Based on that, researchers in this study want to take a solid position on whether macroeconomic variables positively or negatively or of no effect on the performance of deposit money banks (DMBs) in Nigeria. The study made use of suitable finametrica tools to analyze the models. The results of the Error Correction Model and General Method Moments results that all the macroeconomic variables employed (economic growth rate, interest rate, inflation rate, money supply and exchange rate in this study have no significant relationship with bank performance. VECG ranger Causality/Block Exogeneity Wald Test observed that each and jointly, the macroeconomic variables do not cause bank performance both in the short run and long run. Again, impulse response result revealed that bank performance responds insignificantly to the shocks of all the macroeconomic variables. Consequently the researchers advocate that deposit money banks in Nigeria within herent discretionary policy be proactive to the monetary and fiscal policies of regulatory authorities in order to enhance their performance.
Macroeconomic Variables, ROA, ECM, GMM, VAR
To cite this article
Ejem Chukwu Agwu, Ogbonna Udochukwu Godfrey, Ogbulu Onyemachi Maxwell, Do Macroeconomic Variables Predict Deposit Money Banks’ Performance in Nigeria, International Journal of Accounting, Finance and Risk Management. Vol. 5, No. 3, 2020, pp. 118-130. doi: 10.11648/j.ijafrm.20200503.11
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