A STRUCTURAL MODELING OF ECONOMIC IMPLICATIONS OF BANKRUPTCY IN POST COVID-19 ERA: EVIDENCE FROM NIGERIA

Saka, K and Badru, J. O. (2020) A STRUCTURAL MODELING OF ECONOMIC IMPLICATIONS OF BANKRUPTCY IN POST COVID-19 ERA: EVIDENCE FROM NIGERIA. In: 2nd International Conference, The Federal Polytechnic Ilaro, November, 2020, The Federal Polytechnic Ilaro, Ogun State, Nigeria.

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Abstract

The outbreak of Covid-19 pandemic presents more devastating economic and financial consequences such as bankruptcy to performance of companies with potential effects on the economy. This study, therefore, employs Structural Equation Modeling (SEM) to analyse economic implications of bankruptcy in post Covid-19 period using weighted survey data with a view to understand structural analysis of bankruptcy and guide policy reforms on it. Maximum likelihood estimation method was used to analyse perceptions and opinions of 291 experts on bankruptcy consisting of Credit / Loan Officers in Banks, Official Receivers, Economics and Finance Lecturers, and Debt Management Officials which represent the unit of analysis. Stratified sampling technique was adopted to randomly select the respondents and sample weight was applied to avoid under-representation. The findings reveal that there are devastating economic implications of bankruptcy if occurs in Nigeria in post Covid-19 regime. Measurement model estimation results indicate significant economic implications such as loss of income due to loss of formal employment, reduction in energy consumption, fall in industrial / manufacturing production, fall in small and medium scale enterprises output and finished products, a decline in research and development programmes and reduction in delivery networks across the country. However, puzzling findings through structural model estimation at aggregate data level indicate that bankruptcy in Nigeria will likely cause significant increase in GDP and spur innovation and capital investment but will significantly reduce aggregate supply in the economy. The study renders policy advice that government should adopt bankruptcy reforms that ensure significant reduction in interest rates and increased costs of filing for bankruptcy.

Item Type:	Conference or Workshop Item (Paper)
Subjects:	Q Science > QA Mathematics
Divisions:	Faculty of Engineering, Science and Mathematics > School of Mathematics
Depositing User:	Mr. Bolanle Yisau I.
Date Deposited:	14 Feb 2022 11:23
Last Modified:	14 Feb 2022 11:23
URI:	http://eprints.federalpolyilaro.edu.ng/id/eprint/1916

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