Forum for Economic and Financial Studies

Globalization and capital formation in Nigeria

Benedict Ikemefuna Uzoechina — 2024-05-08

No country can achieve sustained economic growth without substantial investments in capital formation. Nigeria is rich in natural resources, but due to inadequate capital and technology, these resources have not been fully tapped and maximized. This study seeks to provide another gateway to unlocking the dearth of capital formation for development by specifically investigating the impact of financial and trade globalization on capital formation in Nigeria within the period 1990–2022. The autoregressive distributed lag (ARDL) technique was adopted for data analysis. The findings of this study indicate that while trade globalization has a negative effect on capital formation in both the long run and short run, respectively, financial globalization exerts a negative effect on capital formation in the long run but a positive effect in the short run. Nevertheless, financial and trade globalization exert detrimental effects on capital formation in the long run. A major policy recommendation is that Nigeria should play a key role in the African Continental Free Trade Area in order to boost her trade and financial competitiveness within Africa and so be able to lunch herself into the global space and thus tap the potential benefits of trade and financial globalization.

The banking system of Ukraine as a factor of social stability in the war

Anatolii Oleksandrovych Drobiazko — 2024-05-21

Before the collapse of the USSR, Ukraine was one of the 15 socialist republics. Along with Belarus, the Russian Federation, and the USSR, Ukraine is one of the founders of the United Nations. Ukraine has gone through transformations from a command-administrative to a market system in 30 years. The driving force behind this development was the national democratic forces, the leaders of which were former dissidents of the USSR. One of the main factors of market transformations in Ukraine is the national private banking business. In the conditions of Russia’s direct military aggression against Ukraine in 2022, the banking business of Ukraine has shown its institutional capacity and is one of the stabilizing factors of society. Thanks to the integration of Ukraine’s banking business into the global financial system, millions of Ukrainian refugees have the opportunity to use their accumulated funds in the national currency abroad. The purpose of this article is to analyze the impact of the banking sector of Ukraine on the country’s democratic development and the contribution of the banking system to countering Russian aggression. The article considers further ways of development of the banking system of Ukraine in the post-war period.

The economic implications of Nigeria’s foreign debt servicing and sustainability

Samson Adeniyi Aladejare — 2024-11-01

Despite extensive literature examining the role foreign debt plays in the growth of the Nigerian economy, seldom do they simultaneously consider the effect of external debt servicing and sustainability. Accordingly, this study examined the impact of external debt servicing and sustainability on the economic growth of Nigeria for the period between 1980 and 2022. The auto-regressive distributed lag (ARDL) model was adopted to measure the effect of the explanatory variables on the dependent variable. Empirically, the study demonstrated that the impact of debt sustainability was insufficient on the economy; notwithstanding being positive in the long run. Thus, suggesting the presence of a sovereign Ponzi finance in Nigeria’s debt management. However, the effects of external debt servicing and foreign debt interest payment were significant and negative on the economy in the short and long run periods. Thus, showing that resources being used to service the debt of the nation, crowd-out funds that could have been used to spur growth of the economy. Generally, the study affirmed the applicability of the debt-overhang hypothesis for the country. Conversely, exchange rate significantly and positively impacted the economy, indicating that an improvement in the value of the Naira, will be indicative of an improvement in the economy. Hence, the study recommends amongst others that effective external debt management strategies such as the debt for equity swap programme should be adopted by fiscal authorities in the country.

Shattering the glass ceiling: The unseen impact of gender diversity on financial transparency

Amna Arshad — 2024-11-19

This bibliometric analysis explores the relationship between financial reporting quality and top management team gender diversity within the field of management and business. A total of 395 journal articles related to financial reporting quality from 2003 to 2020 were reviewed. Utilizing ‘biblioshiny’, a web interface of the ‘bibliometric 3.0’ package in R-Studio, this study conducted a comprehensive bibliometric analysis and visualization. The research examines key sources, influential authors, countries, and thematic trends through co-occurrence network analysis and thematic mapping. By applying Bradford’s Law, core sources and publications are categorized based on output, distinguishing high-production from low-production sources. The findings highlight the increasing importance of gender diversity in top management teams and its positive impact on corporate governance and financial transparency. The presence of women in leadership roles fosters ethical behavior, reduces earnings manipulation, and enhances the overall quality of financial reporting. This analysis also reveals a strong connection between gender diversity and financial reporting quality, indicating that diverse leadership improves corporate governance practices. The study provides a foundation for future research, offering insights into key trends and research streams, and encourages further investigation into the impact of diverse leadership on financial outcomes across various organizational contexts.

Opportunities and challenges of AI in financial risk management: A brief labour-centric analysis

Kanupriya — 2024-11-14

This study examines the significant impact of artificial intelligence (AI) on financial risk management. As financial markets become more interconnected, AI adoption has become an essential requirement. AI-driven risk management systems enable financial institutions to streamline operations, adhere to regulatory standards and navigate the complexities of the financial environment. The study uses existing literature on AI’s opportunities and challenges; primarily corporate study reports and journal articles to discuss future policy implications. AI’s impact extends beyond quantitative evaluations, permeating a culture of innovation and adaptability within financial organizations. The use of natural language processing, machine learning and predictive analytics allows banks to revolutionize risk management strategies. AI enables proactively predicting potential challenges, enhancing the precision and efficacy of risk evaluations. This proactive approach is vital for sustaining growth and resilience in an ever-evolving financial landscape. Investing in AI technologies not only safeguards operations against uncertainties but also redefines the future of the finance and banking industries. The seamless integration of AI into risk management processes positions the financial sector as more secure, efficient and innovative. Cultivating a workplace culture that equips employees with the necessary skills and expertise to leverage AI technologies effectively is crucial. This study highlights the crucial role of AI in financial risk management and its role in securing the future of financial systems, with labour welfare in the centre.