The Effect of Managerial Performance on Shareholders’ Wealth Maximization of Conglomerate Firms in Nigeria

ABSTRACT  

are mostly owned by thousands of . The complex nature of firms serves as an for owners to appoint qualified personnel to manage their affairs in order to achieve organizational goals. Thus, this study assesses the effect of Managerial Performance on Shareholders’ Wealth of Conglomerate Firms in Nigeria.

Data are collected through secondary sources from the annual reports and accounts of the firms, for the period of eight years (2001 to 2008).

The study adopts ex-post factor research design, Economic Value Added (EVA) Model, Compounded Annual Growth Rate Model, and Multiple Regression for data analysis. The study finds that the Managerial Performance measure by EVA Model has a significant effect on Shareholders’ Wealth.

It also establishes that Shareholders’ Wealth is affected by Accounting Performance Measures in Nigeria. The study recommends shareholders consider EVA Model as a Modern Managerial Performance Measure for wealth maximization decision.

Research work is encouraged on the wide application and acceptance of the Economic Value Added (EVA) Model, as a modern managerial performance measure in Nigeria. 

TABLE OF CONTENT

Title Page ………………………………………………………… i
Declaration ……………………………………………………….. ii
Certification ………………………………………………………. iii
Dedication ………………………………………………………… iv
Acknowledgments……………………………………………….. v
Abstract …………………………………………………………….. vi
Table of Contents …………………………………………………… ix
CHAPTER ONE: INTRODUCTION
1.1 Background to the study……………………………………… 1
1.2 Statement of the problem……………………………………… 4
1.3 Objectives of the study……………………………………….. 5
1.4 Research questions…………………………………………….. 6
1.5 Statement of Hypotheses …………………………………….. 6
1.6 Significance of the study……………………………………… 6
1.7 Scope of the study……………………………………………. 7
1.8 Definition of key terms………………………………………….. 9

CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction…………………………………………………….. 11
2.2 Concept of Managerial Performance…………………………… 11
2.3 Managerial Performance Measures……………………………… 13
2.4 Concept of Shareholders’ Wealth and Wealth Maximization…….. 20
2.5 Factors affecting Market Value of Shares………………………. 22
2.6 Managerial Performance in Conglomerate Firms…………………. 24
2.7 Managerial Performance Model…………………………………… 31
2.8 Theoretical Frame Work of the models…………………. ………… 33
2.9 Summary of the Chapter…………………………………………… 37

CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction…………………………………………… …………… 39
3.2 Research Design……..……………………………………………… 39
3.3 Population of the study…………….………………………………… 39
3.4 Sample and sample technique….…………………………………….. 40
3.5 Source of data collection…………………………………………….. 41
3.6 Method of Data Collection…………………………………………… 41
3.7 Techniques of Data Analysis……..……………………………………. 41
3.8 Variables of the Study and Equations…………………………………. 43
3.9 Justification of the Techniques…………………………………………. 45
3.10 Summary………………………………………………………………. 45

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction……………………………………………………………… 47
4.2 Data Presentation and Analyses…………………………………………. 47
4.3 Test of Hypotheses………………………………………………………….. 54
4.4 Result and discussion……………………………………………………… 58
4.5 Summary……………………………………………………………………………………… 59

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS
5.1 Summary……………………..……………………………………. 60
5.2 Conclusions………………………………………………………………………. 60
5.3 Recommendations……………………………………………….. .. 60
Bibliography…………………………………………………………. 62

INTRODUCTION  

Prior to 1980 in Nigeria as well as in many developing countries, successive governments have implemented various agricultural and rural development policies, all in an effort to address perceived shortfall in rural credit, stimulate rural employment and enhance agricultural productivity.

Under these rural credit schemes, institutional resources, program efforts, and government agencies – based top-bottom interventions, to implement mostly supply-led financial development strategies.

That is the channeling of government funds to rural entrepreneurs and small farmers to enhance the contribution of agriculture to economic development (Yaron, 1992).

The above aim prompted the government in Nigeria to establish the defunct Agricultural and Co-operative Bank (NACB). The objective of NACB is to finances agricultural projects through loans to farmers.

Others like the Nigeria Bank for Commerce and Industry (NBCI), People Banks for Nigeria (PBN) as well as xiii Special Banks for Local Areas – Communities banks (CBs) were also established for similar objectives and purposes.

The government also made it mandatory for commercial banks and merchant banks to finance the agricultural sector through loans.

There was also the rural banking scheme of the Central Bank, the Nigeria Agricultural Guarantee Scheme, National Agricultural Scheme,

National Agricultural Land Development Authorities, the Family Economic Advancement Programme (FEAP), and the National Economic Empowerment Development Strategies (NEEDS), which they were all form in lieu of promoting agricultural and rural development. 

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StudentsandScholarship Team.