Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case

The article examines the firm’s investment growth effect following capital liberalization and financial constraints. It employs firm-level aggregated data of 80 firms for the period of 2006 to 2016. Employing the differenced dynamic panel regression technique, the analysis has revealed among others...

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Autor principal:	Okungbowa Ewere Florence O.
Formato:	article
Lenguaje:	EN
Publicado:	Sciendo 2021
Materias:	capital account liberalization (capital movement) cashflows firms investment profit p49 f21 h32 p45 Business HF5001-6182 Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/c8d33293d87d4dc0b6e1389884c46c2b
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spelling	oai:doaj.org-article:c8d33293d87d4dc0b6e1389884c46c2b2021-12-05T14:11:07ZCash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case2256-039410.2478/eb-2021-0014https://doaj.org/article/c8d33293d87d4dc0b6e1389884c46c2b2021-01-01T00:00:00Zhttps://doi.org/10.2478/eb-2021-0014https://doaj.org/toc/2256-0394The article examines the firm’s investment growth effect following capital liberalization and financial constraints. It employs firm-level aggregated data of 80 firms for the period of 2006 to 2016. Employing the differenced dynamic panel regression technique, the analysis has revealed among others that investment growth appears to be significantly determined by cash flow (internal), thereby indicating the presence of profound financial constraint among firms in all industries. Second, the capital account liberalization appears to drive investment more through the indirect channel (capital/credit availability channel proxied by cash flow). Third, capital account liberalization-investment growth nexus appears to be less sensitive and significant with high profitability. This could be attributed to “profit flight” or repatriation of profit by foreign investors who may not necessarily prefer ploughing back of profit, which has implication for further expansion of investment among firms. This suggests that the level of capital openness is still low; hence, there is a need for further liberalization of the capital account with some mandate of profit ploughing back.Okungbowa Ewere Florence O.Sciendoarticlecapital account liberalization (capital movement)cashflowsfirmsinvestmentprofitp49f21h32p45BusinessHF5001-6182Economics as a scienceHB71-74ENEconomics and Business, Vol 35, Iss 1, Pp 201-214 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	capital account liberalization (capital movement) cashflows firms investment profit p49 f21 h32 p45 Business HF5001-6182 Economics as a science HB71-74
spellingShingle	capital account liberalization (capital movement) cashflows firms investment profit p49 f21 h32 p45 Business HF5001-6182 Economics as a science HB71-74 Okungbowa Ewere Florence O. Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
description	The article examines the firm’s investment growth effect following capital liberalization and financial constraints. It employs firm-level aggregated data of 80 firms for the period of 2006 to 2016. Employing the differenced dynamic panel regression technique, the analysis has revealed among others that investment growth appears to be significantly determined by cash flow (internal), thereby indicating the presence of profound financial constraint among firms in all industries. Second, the capital account liberalization appears to drive investment more through the indirect channel (capital/credit availability channel proxied by cash flow). Third, capital account liberalization-investment growth nexus appears to be less sensitive and significant with high profitability. This could be attributed to “profit flight” or repatriation of profit by foreign investors who may not necessarily prefer ploughing back of profit, which has implication for further expansion of investment among firms. This suggests that the level of capital openness is still low; hence, there is a need for further liberalization of the capital account with some mandate of profit ploughing back.
format	article
author	Okungbowa Ewere Florence O.
author_facet	Okungbowa Ewere Florence O.
author_sort	Okungbowa Ewere Florence O.
title	Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
title_short	Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
title_full	Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
title_fullStr	Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
title_full_unstemmed	Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case
title_sort	cash flow and profit impact on capital account liberalization-investment growth nexus in nigeria: an aggregated firm case
publisher	Sciendo
publishDate	2021
url	https://doaj.org/article/c8d33293d87d4dc0b6e1389884c46c2b
work_keys_str_mv	AT okungbowaewereflorenceo cashflowandprofitimpactoncapitalaccountliberalizationinvestmentgrowthnexusinnigeriaanaggregatedfirmcase
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Cash Flow and Profit Impact on Capital Account Liberalization-Investment Growth Nexus in Nigeria: An Aggregated Firm Case

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