An investigation of financial management behaviour of administrators, budget slacks, and state-owned enterprises’ performance in Nigeria.
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Date
2023
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Abstract
The study investigates the financial management behaviour of administrators, budget slack
adoption and performance of the State-Owned Enterprises of the Federal Government of Nigeria.
A sample of 385 top administrators from all the existing 202 State-Owned Enterprises in various
sectors at the federal level in Nigeria were selected and structured questionnaire was used to
harvest information from them. They were analysed using multiple quantitative techniques ranging
from factor and principal component analysis to weighted least square regression analysis, ordinal
regression analysis, and logistics regression analysis, among others. The results show that about
47.3% of the administrators showed responsible financial management behaviours scale while
about 52.7% reflected irresponsible financial management behaviour scale. Furthermore, Cash
Management Sub-scale with coefficient of 0.1571282 is statistically significant at 5% level and
thus, plays the most crucial role in developing the financial management behaviours scale, this is
followed by socio-cultural beliefs scale. In another result, income, family size, financial
knowledge, and financial literacy account for the largest variation in financial management
behaviour of the administrators. Moreover, the result shows that the adoption of budget slack to a
large extent does not significantly impact the financial management behaviour of the
administrators. Optimism with coefficient of 0.5605328 and deliberative thinking with coefficient
of 0.0880613 are the two factors that significantly impact budget slack adoption. A significant
relationship was established between the financial management behaviour of the administrators
and the State-Owned Enterprises’ performance in the last objective. More importantly, it was
revealed that the irresponsible financial management behaviours scale has a more significant
adverse effect on the performance of State-Owned Enterprises. The general implication of the
study is that the sociocultural beliefs sub-scale, which was not captured in any of the previous
studies as a measure of financial management behaviour, proved to be a good measure in this part
of the world. The study further shows that budget slack adoption effect on financial management
behaviour is not significant. Finally, the implication from findings in the survey shows that
irresponsible financial management behaviour of the administrators has a significant negative
impact on the performance of the SOEs.
Description
Doctoral Degree. University of KwaZulu-Natal, Durban.