Corruption perception, institutional quality and performance of listed companies in Nigeria
We examine the effect of corruption perception and institutional quality on the performance of firms based on the extracted data for 135 listed companies in Nigeria with timeframe 2013–2017. We first use the Transparency International Corruption Perception Index for the baseline analysis, which eval...
| Main Authors: | , , , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2019-10-01
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| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844019362292 |
| _version_ | 1828851553932410880 |
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| author | Stephen Ojeka Alex Adegboye Kofo Adegboye Olaoluwa Umukoro Olajide Dahunsi Emmanuel Ozordi |
| author_facet | Stephen Ojeka Alex Adegboye Kofo Adegboye Olaoluwa Umukoro Olajide Dahunsi Emmanuel Ozordi |
| author_sort | Stephen Ojeka |
| collection | DOAJ |
| description | We examine the effect of corruption perception and institutional quality on the performance of firms based on the extracted data for 135 listed companies in Nigeria with timeframe 2013–2017. We first use the Transparency International Corruption Perception Index for the baseline analysis, which evaluates the public officials and politicians’ corruption practices. To capture institutional quality, which depicts the level of law enforcement to curb corruptive practices of the public officials, we use the first component via Principle Component Analysis of six governance indicators extracted from World Bank Governance Indicators. We then use the Generalized Method of Moment (GMM) for the analysis. We find that corruption is negatively related to the market value (TobinQ) and accounting value performance (ROA). Similarly, institutional quality is negatively related to TobinQ and ROA. The results suggest that corruption and institutional quality weaken the market and accounting performance firms in Nigeria. We further compare the extent of corruption and institutional quality on performance between financial and non-financial institution. We find that both corruption and weak institutional environment tend to impair the market and accounting-based performance of non-financial firms, which could be traced to the less regulatory body in such institution compared to the financial institution. We suggest that Nigeria needs more effective and strong mechanisms proactive to curb corruption practices and weak institutional quality. |
| first_indexed | 2024-12-12T23:34:17Z |
| format | Article |
| id | doaj.art-5a39592366ad4d6aab651db5299982c9 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-12-12T23:34:17Z |
| publishDate | 2019-10-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-5a39592366ad4d6aab651db5299982c92022-12-22T00:07:34ZengElsevierHeliyon2405-84402019-10-01510e02569Corruption perception, institutional quality and performance of listed companies in NigeriaStephen Ojeka0Alex Adegboye1Kofo Adegboye2Olaoluwa Umukoro3Olajide Dahunsi4Emmanuel Ozordi5Department of Accounting, Covenant University, Ota, Ogun State, NigeriaDepartment of Accounting, Covenant University, Ota, Ogun State, Nigeria; Corresponding author.Department of Accounting, Obafemi Awolowo University, Ile-Ife, Osun State, NigeriaDepartment of Accounting, Covenant University, Ota, Ogun State, NigeriaDepartment of Accounting, Covenant University, Ota, Ogun State, NigeriaDepartment of Accounting, Covenant University, Ota, Ogun State, NigeriaWe examine the effect of corruption perception and institutional quality on the performance of firms based on the extracted data for 135 listed companies in Nigeria with timeframe 2013–2017. We first use the Transparency International Corruption Perception Index for the baseline analysis, which evaluates the public officials and politicians’ corruption practices. To capture institutional quality, which depicts the level of law enforcement to curb corruptive practices of the public officials, we use the first component via Principle Component Analysis of six governance indicators extracted from World Bank Governance Indicators. We then use the Generalized Method of Moment (GMM) for the analysis. We find that corruption is negatively related to the market value (TobinQ) and accounting value performance (ROA). Similarly, institutional quality is negatively related to TobinQ and ROA. The results suggest that corruption and institutional quality weaken the market and accounting performance firms in Nigeria. We further compare the extent of corruption and institutional quality on performance between financial and non-financial institution. We find that both corruption and weak institutional environment tend to impair the market and accounting-based performance of non-financial firms, which could be traced to the less regulatory body in such institution compared to the financial institution. We suggest that Nigeria needs more effective and strong mechanisms proactive to curb corruption practices and weak institutional quality.http://www.sciencedirect.com/science/article/pii/S2405844019362292EconomicsBriberyCorruption perceptionInstitutional environmentFirm performanceNigeria |
| spellingShingle | Stephen Ojeka Alex Adegboye Kofo Adegboye Olaoluwa Umukoro Olajide Dahunsi Emmanuel Ozordi Corruption perception, institutional quality and performance of listed companies in Nigeria Heliyon Economics Bribery Corruption perception Institutional environment Firm performance Nigeria |
| title | Corruption perception, institutional quality and performance of listed companies in Nigeria |
| title_full | Corruption perception, institutional quality and performance of listed companies in Nigeria |
| title_fullStr | Corruption perception, institutional quality and performance of listed companies in Nigeria |
| title_full_unstemmed | Corruption perception, institutional quality and performance of listed companies in Nigeria |
| title_short | Corruption perception, institutional quality and performance of listed companies in Nigeria |
| title_sort | corruption perception institutional quality and performance of listed companies in nigeria |
| topic | Economics Bribery Corruption perception Institutional environment Firm performance Nigeria |
| url | http://www.sciencedirect.com/science/article/pii/S2405844019362292 |
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