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OLOBAYO, TAYO PRECIOUS

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Download the complete Banking and finance topic and material (chapter 1-5) titled RELATIONSHIP BANKING AND PERFORMANCE OF MANUFACTURING SECTOR FIRMS: EVIDENCE FROM NIGERIA here on PROJECTS.ng. See below for the abstract, table of contents, list of figures, list of tables, list of appendices, list of abbreviations and chapter one. Click the DOWNLOAD NOW button to get the complete project work instantly.

 

PROJECT TOPIC AND MATERIAL ON RELATIONSHIP BANKING AND PERFORMANCE OF MANUFACTURING SECTOR FIRMS: EVIDENCE FROM NIGERIA

The Project File Details

  • Name: RELATIONSHIP BANKING AND PERFORMANCE OF MANUFACTURING SECTOR FIRMS: EVIDENCE FROM NIGERIA
  • Type: PDF and MS Word (DOC)
  • Size: [133KB]
  • Length: [70] Pages

 

ABSTRACT

This study focused on examining the effect of Relationship banking on the performance of manufacturing sectors in Nigeria within the period of 2010 to 2014. This study was carried out to investigate the implication of banking relationship on firm’s performance in the manufacturing sector in Nigeria, using the number of banks as proxy for Relationship banking and leverage as proxy for effects of increase in banking relationships.

Secondary data were collected from the publicly available audited financial statements of the companies selected. Ordinary least Squares Regression was implemented using panel data in testing the correlation between Relationship banking and performance of twelve manufacturing companies respectively while descriptive analysis was done with the use of graph in analyzing alterations in the variables over time.

The result from the ordinary least squares (OLS) regression analysis showed that Relationship banking does not have any significant relationship on the performance of the twelve Nigerian manufacturing companies used in this study.

The study concluded that the number of banking relationships themanufacturing companies have does not determine or have any form of effect on the performance of these firms.This is possible, in that whether there is a decrease or increase in these banking relationships to the manufacturing sector, it neither discourages, nor encourages these manufacturing sectors to expand their businesses and scope of operation, which has ultimately contributed to the massive decline in Nigerian manufacturing sectors.

 

Keywords:     Profit Margin, Number of banks, Leverage, Manufacturing companies, Banking

Relationship

Word Count: 232

TABLE OF CONTENTS

Content                                                                                                                       Page

Title Page                                                                                                                                i

Certification                                                                                                                            ii

Dedication                                                                                                                  iii

Acknowledgments                                                                               iv

Abstract                                                                                                                                  v

Table of Contents                                                                                                       vi

List of Tables

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study                                                                                                 1

1.2 Statement of the Problem                                                                                                 5

1.3 Objective of the Study                                                                                                     6

1.4 Research Question                                                                                                            6

1.5 Hypothesis                                                                                                                        6

1.6 Scope of the Study                                                                                                           6

1.7 Significance of the Study                                                                                                  7

1.8 Justification for the Study                                                                                                 7

1.9 Operational Definition of Terms                                                                                       7

CHAPTER TWO: REVIEW OF LITERATURE

2.1 Conceptual Review                                                                                                           9

2.1.1. Relationship Lending                                                                                                    9

2.1.2 Lending Relationship in Manufacturing Companies                                                     10

2.1.3 Multiple Relationship of Manufacturing Industries in Banks                                       11

2.1.4 The Optimal Number of Lender Banks                                                                         12

Content                                                                                                                       Page

2.1.5 Effect of Credit Market Competition on Lending Relationships                                  13

2.1.6 Effect of Bank-Firm Relationship                                                                                 14

2.1.7 Profitability                                                                                                                    15

2.1.8 Financial Leverage                                                                                                         16

2.2 Theoretical Review                                                                                                           18

2.2.1 Theories of Bank Lending                                                                                             18

2.2.2 The financial Intermediation theory of banking                                                            18

2.2.3 Loan Pricing Theory                                                                                                      18

2.2.4 Firm Characteristics Theories                                                                                         19

2.2.5 Theory of Multiple-Lending                                                                                          19

2.2.6 Credit Market Theory                                                                                                     20

2.2.7 The Signaling Arguments                                                                                              20

2.2.8 Hold-Up and Soft-Budget-Constraint Theories                                                                        20

2.2.9 Theory of optimal number of banking relationship                                                        21

2.3 Empirical Review                                                                                                              21

2.4 Gaps in the Literature                                                                                                       30

CHAPTER THREE: METHODOLOGY

3.0 Introduction                                                                                                                      31

3.1 Research Design                                                                                                               31

3.2 Population                                                                                                                         31

3.3 Sample size and sampling Technique                                                                                32

3.4 Method of Data Collection                                                                                               32

Content                                                                                                                                   Page

3.5 Method of Data Analysis                                                                                                 32

3.6 Model Specification                                                                                                          32

3.7 Analytical Technique for Model Estimation                                                                      33

3.8 Ethical Consideration                                                                                                       33

CHAPTER FOUR: DATA ANALYSIS, RESUTS,

   DISCUSSION OF FINDINGS

4.0 Introduction                                                                                                                      35

4.1 Graphical Illustration and Descriptive Statistics                                                              35

4.1.1 Trend of the Variables Overtime                                                                                   35

4.2 Descriptive and Summary Statistics                                                                                 44

4.3 Correlation Analysis                                                                                                         49

4.4 Empirical Analysis and Results                                                                                        50

4.4.1 Testing for Research Hypothesis                                                                                   50

4.4.2 Regression Analysis                                                                                                       50

4.4.3 Effect of Banking Relationships on Firm Performance                                                 50

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1 Summary                                                                                                                           52

5.1.1 Summary of Findings                                                                                                    53

5.2 Conclusion                                                                                                                        54

5.3 Recommendations                                                                                                                        54

5.4 Contribution to Knowledge                                                                                              55

5.5 Limitation of the Study                                                                                                    55

5.6 Suggestion for Further Studies                                                                                         56

Content                                                                                                                                   Page

References                                                                                                                              57

 

LIST OF TABLES

Table                                                                                                                                       Page

4.1:      Descriptive Statistics of all sampled manufacturing firms                                         44

4.2:      Descriptive Statistics by Manufacturing Industries                                                    48

4.3:      Correlation Analysis                                                                                                   49

4.4:      Result of the Impact of Relationship Banking on Firm Performance                        51

 

 

LIST OF FIGURES

Figure                                                                                                                                      Page

4.1:      Profit margin, leverage and number of banks in Julius Berger PLC                           36

4.2:      Profit margin, leverage and number of banks in Unilever Plc                                    36

4.3:      Profit margin, leverage and banks in Nigerian Breweries Plc                                     37

4.4:      Profit margin, leverage and banks in NASCON Applied Industries Plc                   38

4.5:      Profit margin, leverage and banks in CAP Plc                                                           39

4.6:      Profit margin, leverage and banks in May & Baker Nigeria Plc                                 39

4.7:      Profit margin, leverage and banks in Honeywell Flour Mills Plc                               40

4.8:      Profit margin, leverage and banks in Dangote Sugar                                                 41

4.9:      Profit margin, leverage and banks in Guinness Nigeria Plc                                        41

4.10:    Profit margin, leverage and banks in Ashaka Cement                                                42

4.11:    Profit margin, leverage and banks in Berger Paints Nigeria Plc                                 43

4.12:    Profit margin, leverage and banks in UAC Nigeria Plc                                              43

CHAPTER ONE

Content                                                                                                                       Page

Title Page                                                                                                                                i

Certification                                                                                                                            ii

Dedication                                                                                                                  iii

Acknowledgments                                                                               iv

Abstract                                                                                                                                  v

Table of Contents                                                                                                       vi

List of Tables

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study                                                                                                 1

1.2 Statement of the Problem                                                                                                 5

1.3 Objective of the Study                                                                                                     6

1.4 Research Question                                                                                                            6

1.5 Hypothesis                                                                                                                        6

1.6 Scope of the Study                                                                                                           6

1.7 Significance of the Study                                                                                                  7

1.8 Justification for the Study                                                                                                 7

1.9 Operational Definition of Terms                                                                                       7

CHAPTER TWO: REVIEW OF LITERATURE

2.1 Conceptual Review                                                                                                           9

2.1.1. Relationship Lending                                                                                                    9

2.1.2 Lending Relationship in Manufacturing Companies                                                     10

2.1.3 Multiple Relationship of Manufacturing Industries in Banks                                       11

2.1.4 The Optimal Number of Lender Banks                                                                         12

Content                                                                                                                       Page

2.1.5 Effect of Credit Market Competition on Lending Relationships                                  13

2.1.6 Effect of Bank-Firm Relationship                                                                                 14

2.1.7 Profitability                                                                                                                    15

2.1.8 Financial Leverage                                                                                                         16

2.2 Theoretical Review                                                                                                           18

2.2.1 Theories of Bank Lending                                                                                             18

2.2.2 The financial Intermediation theory of banking                                                            18

2.2.3 Loan Pricing Theory                                                                                                      18

2.2.4 Firm Characteristics Theories                                                                                         19

2.2.5 Theory of Multiple-Lending                                                                                          19

2.2.6 Credit Market Theory                                                                                                     20

2.2.7 The Signaling Arguments                                                                                              20

2.2.8 Hold-Up and Soft-Budget-Constraint Theories                                                                        20

2.2.9 Theory of optimal number of banking relationship                                                        21

2.3 Empirical Review                                                                                                              21

2.4 Gaps in the Literature                                                                                                       30

CHAPTER THREE: METHODOLOGY

3.0 Introduction                                                                                                                      31

3.1 Research Design                                                                                                               31

3.2 Population                                                                                                                         31

3.3 Sample size and sampling Technique                                                                                32

3.4 Method of Data Collection                                                                                               32

Content                                                                                                                                   Page

3.5 Method of Data Analysis                                                                                                 32

3.6 Model Specification                                                                                                          32

3.7 Analytical Technique for Model Estimation                                                                      33

3.8 Ethical Consideration                                                                                                       33

CHAPTER FOUR: DATA ANALYSIS, RESUTS,

   DISCUSSION OF FINDINGS

4.0 Introduction                                                                                                                      35

4.1 Graphical Illustration and Descriptive Statistics                                                              35

4.1.1 Trend of the Variables Overtime                                                                                   35

4.2 Descriptive and Summary Statistics                                                                                 44

4.3 Correlation Analysis                                                                                                         49

4.4 Empirical Analysis and Results                                                                                        50

4.4.1 Testing for Research Hypothesis                                                                                   50

4.4.2 Regression Analysis                                                                                                       50

4.4.3 Effect of Banking Relationships on Firm Performance                                                 50

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1 Summary                                                                                                                           52

5.1.1 Summary of Findings                                                                                                    53

5.2 Conclusion                                                                                                                        54

5.3 Recommendations                                                                                                                        54

5.4 Contribution to Knowledge                                                                                              55

5.5 Limitation of the Study                                                                                                    55

5.6 Suggestion for Further Studies                                                                                         56

Content                                                                                                                                   Page

References                                                                                                                              57

 

LIST OF TABLES

Table                                                                                                                                       Page

4.1:      Descriptive Statistics of all sampled manufacturing firms                                         44

4.2:      Descriptive Statistics by Manufacturing Industries                                                    48

4.3:      Correlation Analysis                                                                                                   49

4.4:      Result of the Impact of Relationship Banking on Firm Performance                        51

 

 

LIST OF FIGURES

Figure                                                                                                                                      Page

4.1:      Profit margin, leverage and number of banks in Julius Berger PLC                           36

4.2:      Profit margin, leverage and number of banks in Unilever Plc                                    36

4.3:      Profit margin, leverage and banks in Nigerian Breweries Plc                                     37

4.4:      Profit margin, leverage and banks in NASCON Applied Industries Plc                   38

4.5:      Profit margin, leverage and banks in CAP Plc                                                           39

4.6:      Profit margin, leverage and banks in May & Baker Nigeria Plc                                 39

4.7:      Profit margin, leverage and banks in Honeywell Flour Mills Plc                               40

4.8:      Profit margin, leverage and banks in Dangote Sugar                                                 41

4.9:      Profit margin, leverage and banks in Guinness Nigeria Plc                                        41

4.10:    Profit margin, leverage and banks in Ashaka Cement                                                42

4.11:    Profit margin, leverage and banks in Berger Paints Nigeria Plc                                 43

4.12:    Profit margin, leverage and banks in UAC Nigeria Plc                                              43

 

 

 

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