IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v6y2022i5p374-378.html
   My bibliography  Save this article

Return on Capital Employed of Listed Manufacturing Companies and Government Spending on Infrastructures in Nigeria (1990 -2015)

Author

Listed:
  • Olajire Aremu Odunlade

    (Department of Accounting, Babcock University, Ilisan-Remo Ogun State, Nigeria)

  • Folajimi Festus Adegbie

    (Department of Accounting, Babcock University, Ilisan-Remo Ogun State, Nigeria)

Abstract

Government spending on infrastructures in various subsectors of the economy such as power, roads, education for human capital development and security is often directed towards increase in the production of goods and services and creating environment that will enhance the welfare of the citizens. However poor state of infrastructure in Nigeria, have been noted to be affecting the financial performance of manufacturing companies in the country. Our focus in this study was to link government spending on Power, Roads, Security and Human Capital Development with the micro variables of firm performance in the area of Return On Capital Employed (ROCE).The study adopted ex-post facto research design. The population of the study was 83 listed manufacturing companies in Nigeria as at December 31, 2016, from which a sample size of 20 was purposively selected based on availability of data covering the period from 1990 to 2015. Secondary data were obtained from published financial statements of listed manufacturing companies in Nigeria, publications of government and the World Bank. Validity and Reliability of the data were based on the reports of external auditors and other regulatory agencies. The data were analyzed using descriptive and inferential statistical methods. The study found that government spending on Power, Roads, security and human capital development have no joint significant effect on ROCE (F(4, 21 ) = 0.523, the P-value associated with the F-value as is 0.720, this is greater than 0.05 indicating that there was no significant relationship between the independent and the dependent variables. adj R2 = -0.083. Coefficients of the independent variables show that Government spending on Power had positive but insignificant effect on ROCE (t=0.524, p>0.05). Roads had negative, insignificant effect on ROCE(t=-0.498, p>0.05) Security had negative but insignificant effect on ROCE (t(26) = -1.221, p>0.05), HCD had positive but insignificant effect on ROCE (t(26) = 0.823, p>0.05). The study concluded that government spending on infrastructural development in the areas of power, road, security and education did not impact on the Return On Capital Employed of manufacturing companies in Nigeria within the period of study. Sustainable industrial development requires adequate funding of infrastructures in Nigeria to reduce cost of operations and increase profitability level of manufacturing companies.

Suggested Citation

  • Olajire Aremu Odunlade & Folajimi Festus Adegbie, 2022. "Return on Capital Employed of Listed Manufacturing Companies and Government Spending on Infrastructures in Nigeria (1990 -2015)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(5), pages 374-378, May.
    • Handle: RePEc:bcp:journl:v:6:y:2022:i:5:p:374-378
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-6-issue-5/374-378.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/virtual-library/papers/return-on-capital-employed-of-listed-manufacturing-companies-and-government-spending-on-infrastructures-in-nigeria-1990-2015/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. J. Paul Dunne & Sam Perlo-Freeman, 2003. "The demand for military spending in developing countries: A dynamic panel analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 461-474.
    2. Mark Broude & Saadet Deger & Somnath Sen, 2013. "Defence, innovation and development: the case of Israel," Journal of Innovation Economics, De Boeck Université, vol. 0(2), pages 37-57.
    3. Paul Dunne & Sam Perlo-Freeman, 2003. "The Demand for Military Spending in Developing Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 23-48.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christos Kollias & Nikolaos Mylonidis & Suzanna-Maria Paleologou, 2007. "A Panel Data Analysis Of The Nexus Between Defence Spending And Growth In The European Union," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(1), pages 75-85.
    2. Sheng-Tung Chen & Jyun-Wei Lai & Arwin Pang, 2015. "The effect of military service system change on the demand for military expenditure," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(6), pages 623-633, December.
    3. Vincenzo Bove & Jennifer Brauner, 2016. "The demand for military expenditure in authoritarian regimes," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 609-625, September.
    4. Bove Vincenzo & Elia Leandro & Pelliccia Marco, 2016. "Centrality in Trade Networks and Investment in Security," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(1), pages 27-39, January.
    5. Masako Ikegami & Zijian Wang, 2023. "Does military expenditure crowd out health-care spending? Cross-country empirics," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(2), pages 1657-1672, April.
    6. Una Hakvåg, 2017. "Russian defense spending after 2010: the interplay of personal, domestic, and foreign policy interests," Post-Soviet Affairs, Taylor & Francis Journals, vol. 33(6), pages 496-510, November.
    7. Islam, Muhammed N., 2015. "Economic growth, repression, and state expenditure in non-democratic regimes," European Journal of Political Economy, Elsevier, vol. 37(C), pages 68-85.
    8. Rota, Mauro, 2011. "Military Burden and the Democracy Puzzle," MPRA Paper 35254, University Library of Munich, Germany.
    9. David K Levine & Salvatore Modica, 2013. "Conflict, Evolution, Hegemony, and the Power of the State," Levine's Working Paper Archive 786969000000000692, David K. Levine.
    10. Odehnal Jakub, 2015. "Military Expenditures and Free-Riding in NATO," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 21(4), pages 479-487, December.
    11. Vahe Lskavyan, 2011. "Democracy levels and the income-military expenditure relationship," Applied Economics Letters, Taylor & Francis Journals, vol. 18(15), pages 1485-1489.
    12. Nikolaos Mylonidis, 2008. "Revisiting The Nexus Between Military Spending And Growth In The European Union," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 265-272.
    13. Seemab Gillani & Muhammad Nouman Shafiq & Tusawar Iftikhar Ahmad, 2019. "Military Expenditures and Health Outcomes: A Global Perspective," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 1(1), pages 1-20, June.
    14. İbrahim Sezer Belliler, 2023. "Convergence of Military Expenditures in MENA Countries: Evidences from a Fourier Panel Unit Root Test with Multiple Breaks," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(39), pages 183-199, December.
    15. Justin Conrad & Hong-Cheol Kim & Mark Souva, 2013. "Narrow interests and military resource allocation in autocratic regimes," Journal of Peace Research, Peace Research Institute Oslo, vol. 50(6), pages 737-750, November.
    16. Duc Hong Vo & Minh Phuoc Bao Tran & Phuong Thi Ha Cao, 2025. "The spillover effects of military spending across superpowers using the TVP - VAR approach," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 15(1), pages 38-53.
    17. Nimonka Bayale & Babatunde Mohamed Sanny Gado & Niim‐Bénoua Nahum Sambieni & Komla Kuma Esobiyu Tchala, 2024. "Dépenses militaires et croissance économique dans l'UEMOA: une analyse des effets de seuil et des canaux de transmission," African Development Review, African Development Bank, vol. 36(1), pages 41-54, March.
    18. Vincenzo Bove & Roberto Nisticò, 2014. "Coups d’état and defense spending: a counterfactual analysis," Public Choice, Springer, vol. 161(3), pages 321-344, December.
    19. Blum, Johannes, 2019. "Arms production, national defense spending and arms trade: Examining supply and demand," European Journal of Political Economy, Elsevier, vol. 60(C).
    20. J. Paul Dunne & Sam Perlo-Freeman & Ron Smith, 2008. "The Demand For Military Expenditure In Developing Countries: Hostility Versus Capability," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 293-302.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:6:y:2022:i:5:p:374-378. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.