Phenomenological Uncertainty

This section reports the regression analyses with respect to the test of the hypotheses formulated in this study. The results are presented in table 4.19-4.23 below:

Hypothesis I:

Ho: The adoption of IFRS does not significantly affect the net interest margin reported by banks in Nigeria.

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H1: The adoption of IFRS significantly affects the net interest margin reported by banks in Nigeria.

The result for the test of Hypothesis I is presented below:

Table 4.19: Model I Summary (nim, ifrsdum and size)

Source: STATA 13.0 Version Output, 2017

From the evaluation of the regression result, we find that R² adjusted is .780 which suggests 78.0% explanatory ability of the estimation for the systematic variation in the dependent variable (Net Interest Margin: nim) with an adjusted value of .22 (22.0%). The unexplained variation is 22.0% (1-.780). The evaluation of the slope coefficients of the explanatory variables revealed the existence of positive relationship between International Financial Reporting Standards (ifrsdum

=2.965354), Bank Size (size =10.43448) reaction to Net Interest Margin (nim:

30.14061) among Nigerian banks as depicted by the slope coefficients. This implies that nim is influenced positively by ifrsdum and size. The result above is further supported by the computed t-values for ifrsdum = (4.36) which is greater than t-tabulated (1.660) suggesting that ifrsdum is a major determinant of nim.

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Also, size = (7.87) which is greater than t-tabulated (1.660), suggesting that size is a major determinant of nim.

Interestingly, we further observed from the result of the f-statistics in Table 4.19 above that F(2, 135) = 17.80 with a probability value of 0.0006 (p=0.006 <

0.05). This further confirms that the adoption of IFRS has significant effect on the net interest margin of banks in Nigeria.

Decision: The above result invalidates the null hypothesis. This led to the rejection of the null hypothesis and acceptance of the alternative hypothesis that the adoption of IFRS by Nigerian banks significantly affects net interest margin.

Hypothesis II:

Ho: The adoption of IFRS does not significantly affect the return on equity reported by banks in Nigeria.

H1: The adoption of IFRS significantly affects the return on equity reported by banks in Nigeria.

The result for the test of Hypothesis II is presented below:

Table 4.20: Model II Summary (retoe, ifrsdum and size)

Source: STATA 13.0 Version Output, 2017

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From the evaluation of the regression result, we find that R² adjusted is .700 which suggests 70.0% explanatory ability of the estimation for the systematic variation in the dependent variable (Return on Equity: retoe) with an adjusted value of .30.0 (30.0%). The unexplained variation is 30.0% (1-.700). The evaluation of the slope coefficients of the explanatory variables revealed the existence of positive relationship between International Financial Reporting Standards (ifrsdum =22.30902), Bank Size (size =28.74772) reaction to Return on Equity (retoe: 235.8257) among Nigerian banks as depicted by the slope coefficients. This implies that retoe is influenced positively by ifrsdum and size.

The result above is further supported by the computed t-values for ifrsdum = (6.10) which is greater than t-tabulated (1.660) suggesting that ifrsdum is a major determinant of retoe. Also, size = (11.17) which is greater than t-tabulated (1.660), suggesting that size is a major determinant of retoe.

Interestingly, we further observed from the result of the f-statistics in Table 4.20 above that F(2, 135) = 16.13 with a probability value of 0.0494 (p=0.0494<

0.05). This further confirms that the adoption of IFRS has significant effect on the return on equity of banks in Nigeria.

Decision: The above result invalidates the null hypothesis. This led to the rejection of the null hypothesis and acceptance of the alternative hypothesis that the adoption of IFRS by Nigerian banks significantly affects return on equity.

108 Hypothesis III:

Ho: The adoption of IFRS does not significantly affect the return on asset reported by banks in Nigeria.

H1: The adoption of IFRS significantly affects the return on asset reported by banks in Nigeria.

The result for the test of Hypothesis III is presented below:

Table 4.21: Model III Summary (retoa, ifrsdum and size)

Source: STATA 13.0 Version Output, 2017

From the evaluation of the regression result, we find that R² adjusted is .801 which suggests 80.1% explanatory ability of the estimation for the systematic variation in the dependent variable (Return on Asset: retoa) with an adjusted value of .19.9 (19.9%). The unexplained variation is 19.9% (1-.801). The evaluation of the slope coefficients of the explanatory variables revealed the existence of positive relationship between International Financial Reporting Standards (ifrsdum

=22.30902), Bank Size (size =28.74772) reaction to Return on Asset (retoa:

235.8257) among Nigerian banks as depicted by the slope coefficients. This implies that retoa is influenced positively by ifrsdum and size. The result above is further supported by the computed t-values for ifrsdum = (4.26) which is greater

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than t-tabulated (1.660) suggesting that ifrsdum is a major determinant of retoa.

Also, size = (9.36) which is greater than t-tabulated (1.660), suggesting that size is a major determinant of retoa.

Another interesting finding from this study is that the result of the f-statistics as shown in Table 4.21 above that F(2, 135) = 13.51 with a probability value of 0.0327 (p=0.0327 < 0.05). This further confirms that the adoption of IFRS has significant effect on the return on asset of banks in Nigeria.

Decision: The above result invalidates the null hypothesis. This led to the rejection of the null hypothesis and acceptance of the alternative that the adoption of IFRS by Nigerian banks significantly affects their return on asset.

Hypothesis IV:

Ho: The adoption of IFRS does not significantly affect the liquidity ratio reported by banks in Nigeria.

H1: The adoption of IFRS significantly affects the liquidity ratio reported by banks in Nigeria.

The result for the test of Hypothesis IV is presented below:

Table 4.22: Model IV Summary (liq, ifrsdum and size)

Source: STATA 13.0 Version Output, 2017

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From the evaluation of the regression result, we find that R² adjusted is .880 which suggests 88.0% explanatory ability of the estimation for the systematic variation in the dependent variable (liquidity ratio: liq) with an adjusted value of 12.0 (12.0%). The unexplained variation is 12.0% (1-.880). The evaluation of the slope coefficients of the explanatory variables revealed the existence of positive relationship between International Financial Reporting Standards (ifrsdum

=22.84795), Bank Size (size =28.44558) reaction to Liquidity Ratio (liq: 235.871) among Nigerian banks as depicted by the slope coefficients. This implies that liq is influenced positively by ifrsdum and size. The result above is further supported by the computed t-values for ifrsdum = (6.71) which is greater than t-tabulated (1.660) suggesting that ifrsdum is a major determinant of liq. Also, size = (10.28) which is greater than t-tabulated (1.660), suggesting that size is a major determinant of liq.

Interestingly, we further observed from the result of the f-statistics in Table 4.22 that F(2, 135) = 10.57 with a probability value of 0.0381 (p=0.0381 < 0.05).

This further confirms that the adoption of IFRS has significant effect on the liquidity ratio of banks in Nigeria.

Decision: The above result invalidates the null hypothesis. This led to the rejection of the null hypothesis and acceptance of the alternative hypothesis that the adoption of IFRS by Nigerian banks significantly affects liquidity ratio.

111 Hypothesis V:

Ho: The adoption of IFRS does not significantly affect the cash to deposit ratio reported by banks in Nigeria.

H1: The adoption of IFRS significantly affects the cash to deposit ratio reported by banks in Nigeria.

The result for the test of Hypothesis V is presented below:

Table 4.23: Model V Summary (capadqr, ifrsdum and size)

Source: STATA 13.0 Version Output, 2017

From the evaluation of the regression result, we find that R² adjusted is .800 which suggests 80.0% explanatory ability of the estimation for the systematic variation in the dependent variable (cash to deposit ratio: capadqr) with an adjusted value of 20.0 (20.0%). The unexplained variation is 20.0% (1-.800). The evaluation of the slope coefficients of the explanatory variables revealed the existence of positive relationship between International Financial Reporting Standards (ifrsdum =11.30676), Bank Size (size =7.472530) reaction to Cash to Deposit Ratio (capadqr: 20.32612) among Nigerian banks as depicted by the slope coefficients. This implies that capadqr is influenced positively by ifrsdum and size.

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The result above is further supported by the computed t-values for ifrsdum = (7.83) which is greater than t-tabulated (1.660) suggesting that ifrsdum is a major determinant of capadqr. Also, size = (12.30) which is greater than t-tabulated (1.660), suggesting that size is a major determinant of capadqr.

Interestingly, we further observed from the result of the f-statistics in Table 4.23 that F(2, 135) = 8.71 with a probability value of 0.0492 (p=0.0492 < 0.05).

This further confirms that the adoption of IFRS has significant effect on the cash to deposit ratio of banks in Nigeria.

Decision: The above result invalidates the null hypothesis. This led to the rejection of the null hypothesis and acceptance of the alternative hypothesis that the adoption of IFRS by Nigerian banks significantly affects their cash to deposit ratio.