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Research Article Open access CC BY 3.0

The Correlation between IT Investment and Corporate Performance In The Nigerian Banking Sector

Hassan Olanrewaju Makinde

Journal of Economics, Management and Trade · pp. 349–365 · Published 11 Dec 2013

10.9734/BJEMT/2014/6409

Abstract

The revolution potential of the new Information and Communication Technology lies in its capacities to instantaneously convert vast network of individuals and organizations across great geographical distances at very little cost. This paper dwells on the correlation between IT investment and corporate performance in the Nigerian banking sector. The study made use of secondary data sourced from the Central Bank of Nigeria statistical bulletin, the National Bureau of Statistics and archives of the four (4) selected banks (using their websites) for the variables between 1986 and 2011. The model for the study has as its dependent variable the banks’ net income and its explanatory variables are investments on ICT, investment on other assets and annual operating cost. Using the Pooled regression techniques; our study revealed that there is a strong positive relationship between the banks’ net income and the annual investment in ICT by the selected banks. That is, ICT has greatly impacted positively and significantly on bank operations in Nigeria given the period of study. The study, therefore recommended that staff training and personnel to handle the information technology system of the bank should be recurring and up to date so as to keep abreast with global best practices.

Correlation information and communication technology vast network operating cost explanatory variables Banking sector

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