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Title An analysis of effects of economic growth on the financial performance of Namibian listed companies
Full text http://hdl.handle.net/11070/3188
Date 2022
Author(s) Heyns, Elize
Abstract The purpose of the study was to analyse the effects of economic growth on the financial performance of Namibian listed companies and examine if the underlying effects are sector-specific. The measure used to assess the financial performance of selected sectors as identified on the NSX was the Return on Equity (ROE). The ROE was then regressed against the macroeconomic variables, including the gross domestic product percentage change (GDP % change) and the inflation rate percentage change as measured by the Consumer Price Index (CPI % change) annual percentage changes. The estimation procedure was performed on secondary data across eleven firms for the periods 2010 to 2020. Additionally, the study was conducted across three identified sectors, the first being, Banks, Finance & Credit Services, the second, Food Retailers and Wholesalers and lastly, Household Goods and Personal Goods. The findings support the hypothesis that economic growth positively affects the ROE of various firms. However, this effect differs in terms of magnitude across various industries. In the Household goods sector and the Food Retailers and Wholesalers sector, the ROE is significantly influenced by the CPI percentage change, more so than the GDP percentage change. Finally, the Banking sector indicated that their ROE is more sensitive to changes in the GDP percentage change than the CPI percentage change. To enhance the financial performance of companies listed on the Namibian Stock Exchange, the study recommends that policymakers ensure the economy is geared toward a sustainable growth path.
Subject(s) Return on equity; Gross domestic product; Consumer price index; NSX; Macroeconomics
Language en
Publisher University of Namibia
Type of publication Thesis
Repository Windhoek - University of Namibia
Added to C-A: 2022-07-04;11:05:05