NIGERIAN CIVIL WAR: THE BIAFRAN INVASION OF MIDWEST AND INTER-GROUP RELATIONS IN THE REGION

Peaceful coexistence is a major challenge in a multi-ethnic region like the Midwest. After the creation of the region in 1963, ethnic distrust dominated the region's body politics. The Biafran invasion of Midwest remained one invent that heightened ethnic distrust in the region. Although, scholars have examined the invasion, the need to re-examine it arises from the fact that the event made ethnic antagonism among the groups in the region more intense than ever before. It is against this backdrop that this paper examines the Biafran invasion of Midwest and its implications on inter-group relations in the region. Relying on primary and secondary sources, the paper is of the opinion that the intense group antagonism and suspicion emanated from the fact that the Biafran incursion into Midwest caused division among the groups in the region. The groups that were loyal to the Nigerian Government opposed the groups that supported Biafra. The paper further argues that the ethnic tension was also as a result of the assumption by the non-Igbo groups in the region that Biafrans were in the region to promote the interest of the Igbo groups.

The Impact of Corporate Governance on Firm Value, Payout Policy, Cost of Capital and Corporate Social Responsibilty.

This study seeks to explore the value of Corporate Governance (CG) practices in Pakistan; a market characterized with week legal investor-protection jurisdiction and concentrated ownership structures. The sample of the study consists of 200 corporate firms listed at the Karachi Stock Exchange for the period 2003 to 2014. The study further categorizes the sample in to small, medium, and large firms on the basis of their market capitalisation. First, this study seeks to explore the value relevance of firm level CG practices in Pakistan. Second, the study examines the influence of CG on the value implication of dividends. Based on the agency theory predictions, the sample of the study is split into high and low governance regimes to examine outcome and substitute agency hypothesis. Third, the study tries to empirically investigate the argument that higher CG is associated with decreased cost of capital. Finally, the study also investigates whether firm-level governance enhances the extent of Corporate Social Responsibility (CSR) in the annual reports. Generalized method of movement results reveal that CG plays a major role in effecting market valuation in Pakistan. The results indicate that a one unit increase in CG is associated with an increase of 0.57 in the value of Q in large Cap firms, followed by medium Cap firms (0.30), and small Cap firms (0.16). In case of joint CG and ownership effect, the results document that low CG rank firms have lower firms value as compare to high CG rank firms. The study also shows that a firm market value varies with the level of its insiders’ ownership, and the pattern of valuation differs relying jointly on CG and insiders’ ownership. The firm is rewarded with higher valuation if it has high CG but lower management ownership, however if the firm has predominant ownership but meanwhile its CG is weak, its firm value is lower. In contrast, the results suggest that the presence of a predominant shareholder adds more value to a small firm. These results imply that in a weak legal protection country such as Pakistan investors look for other indicators such as CG and insiders’ ownership as a guide for seeking additional protection for their investment. The results further documents that stronger governed firms pay higher dividends. The marginal effects presented reveal that a rise of 1 unit in CG score results in an average increase of 0.34 in pool, 0.65 in large, 0.10 in medium, and 0.12 in small Cap firm’s dividend payout ratio. The sample is further split into high and low CG to examine outcome and substitute hypothesis. The results support the outcome agency model which states that high CG ranking firms pay higher dividends than low CG firms. Furthermore, the study also tests the growth opportunities effect. The results suggest that high CG firms with better growth prospects pay lower dividend than otherwise similar firms with poor growth opportunities. On the other hand, the results indicate that weak CG firms distribute similar dividend irrespective of their growth opportunities. Further, the evidence lends support to the hypothesis that CG is an important determinant of enhancing CSR disclosures in annual reports. The results document that low CG rank firms have lower CSR disclosure as compare to high CG rank firms. The results indicate that CG alone is not sufficient to induce firms to provide more CSR information, rather both CG and ownership structure matters in influencing firms’ choice of CSR engagement. The results also show that CG and cost of capital is negatively correlated in large, medium, and small Cap firms. The result confirms the theoretical proposition of the agency theory that investors will be willing to accept a lower risk premium if firms have robust oversight mechanisms to curb managerial opportunism. In case of joint effect of CG and insider’s ownership the results reveal that investors demand lower required rate of return form high CG firms as compare to low CG firms. The results show that firms in the high CG and predominant ownership category pay higher cost of capital as compare to the high CG and low ownership category. Further, for the low CG firms the coefficient on low CG-low ownership category and low CG-predominant category is much higher as compare to high CG-low ownership category. The study also seeks to fulfill the objective about identifying factors that determines firm-level CG. The results indicate that variations in the costs and benefits of different governance practices depend on company’s monitoring and operational characteristics. Furthermore, a one-way ANOVA was conducted to determine if large, medium, and small groups differs in terms of their CG. The results document that there is a statistically significant difference in CG-score between the small Cap and medium Cap firms. Similarly, a statistically significant difference is found between the large Cap and the small Cap firms, and large Cap and medium Cap firms.