College of Bussines and Economics
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College of Bussines and Economics
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Item DETERMINANTS OF HOUSEHOLD PARTICIPATION IN URBAN AGRICULTURE: THE CASE OF GURAGE ZONE, ETHIOPIA(Wolkite University, 2023-01-30) ALEMU LEMMAUrban agriculture plays a very important role in improving household income and decreasingpoverty. Despite its significant role in fulfilling the basic demand of low-income families,household’s participation were very low. Therefore, this study was conducted to identify factorsthat determine household’s participation in urban agriculture and assess the impact ofparticipation on household income in Gurage zone. The study utilized both primary andsecondary data sources, and a multi-stage sampling technique was employed to gatherinformation from 204 households using a structured questionnaire. The logistic regression modelwas employed to analyze the determinants of participation in urban agriculture and propensityscore matching was used to analyze the impact of participation on household income. The resultsof the study show that, 25.76% of the households were practicing in urban agriculture.Household’s decision to participate in urban agriculture was influenced by household sex,education level, income from other sources, access to credit, access to water, access to improvedinputs and access to extension services. The impact analysis results of this study show that urbanagriculture has a positive significant impact on household total income. The average treatmenteffect on the treated was ETB 6803 and it was significant at 1% significance level. In conclusion,this study suggest that urban agriculture practice should be encouraged by governmental andnon-governmental organizations through provision of credit and promotion of alternative watersources to increase urban agriculture participation in the study areaItem INTERNATIONAL REMITTANCE AND ECONOMIC GROWTH IN ETHIOPIA: AN AUTOREGRESSIVE DISTRIBUTED LAG APPROACH(WOLKITE UNIVERSITY, 2018-06) ABDURAHMAN AGIROHaving the general objective of investigating the relationship between international remittances and economic growth in Ethiopia, this study used an auto regressive distributed lag (ARDL) model or Bound Testing approach to co-integration. The data used is from Ethiopian economic association, national bank of Ethiopia and World Bank Development Indicators which spans from 1980 to 2016. The outcome of the study revealed that, both the long run and short run growth impact of international remittance during the study period is positive and significant. Apart from this, other growth determinant factors, such as real gross fixed capital formation, human capita and consumer price index are found to significantly and positively affecting growth in Ethiopia. Trade openness has found Negative and significantly impact economic growth. Moreover, the Granger Causality test has confirmed that there is a unidirectional causality which runs from remittance to output. The most important policy implication that comes out of this study is that the government as well as other concerned stakeholders should work on easing the remittance sending process and cost, so as to better extract the economic benefit of international remittance.Item THE EFFECT OF ELECTRONIC BANKING ON FINANCIAL PERFORMANCE EVIDENCE FROM SELECTED COMMERCIAL BANKS IN ETHIOPIA(WOLKITE UNIVERSITY, 2024-06) TESHOME BEKELE MEREZUThis paper investigates the effect of electronic banking on the financial performance of commercial banks in Ethiopia. The study aims to analyze how the adoption of electronic banking channels, including Automated Teller Machines (ATM), Point of Sale (POS) terminals, mobile banking, and Internet banking, influences banks' profitability and return on equity (ROE). Panel data regression models with a period ofeight years, from 2015 to 2023 were employed to examine the relationship between electronicbanking transaction volumes and financial performance indicators, controlling for bank size. The findings reveal significant associations between certain electronic banking channels and financial performance metrics. Specifically, higher transaction volumes through ATM channels are positivelycorrelated with both return on assets (ROA) and ROE. Conversely, increased usage of POS terminals exhibits a negative impact on ROA, suggesting potential challenges associated with POS transactions. Mobile banking and Internet banking transaction volumes demonstrate positive relationships with ROE, underscoring the importance of these channels in enhancing banks' profitability and shareholder value. Furthermore, the study identifies bank size as a significant determinant of financial performance, with larger banks exhibiting higher profitability. Based on these findings, recommendations are provided for Ethiopian banks to strategically leverage electronic banking channels to improve their financial performance. These recommendations include investing in technological infrastructure, enhancing cybersecurity measures, and tailoring electronic banking services to meet the diverse needs of customers. Overall, this study contributes to the growing body of literature on electronic banking and provides valuable insights for policymakers, bank executives, and researchers interested in the Ethiopian banking sector.Item DETERMINANTS OF FINANCIAL REPORTING QUALITY IN CASE OF INSURANCE COMPANY IN THIOPIA(WOLKITE UNIVERSITY, 2024-05) SEYOUM YILMAThis study intends to assess the determinants of financial reporting quality in case of insurance company in Ethiopia over a period of 2014-2022. Consequently, the study used document review of insurances’ audited financial statements. The explanatory variables used in this study were Leverage (LE), Profitability (ROA), Liquidity (LQ), Auditor Change(AC), Firm Age (FA) and Firm Size(FS).In this study sixteen Insurance companies were selected from a total population of sixteen insurances companies to accomplish a study for the period of nine years (2014-2022) with the total of 144 observations. Moreover, The secondary data were analyzed using descriptive statistics, correlation analysis and panel data analysis and data from document reviews were interpreted quantitatively. The study used panel data and random regression model to analyze the Determinants of Financial Reporting quality of Ethiopian insurance companies. The study found that profitability ratio has positive and insignificant effect on financial reporting quality. While, auditor changes and firm ages had significant effect on financial reporting quality, leverage and liquidity were found to be insignificant effect on financial reporting quality of Ethiopian insurance companies.Item THE EFFECT OF FINANCIAL INNOVATION ON PROFITABLITY OF ETHIOPIAN COMMERCIAL BANKS(WOLKITE UNIVERSITY, 2024-05) SELAM TADEMUFinancial innovation is considered to be a critical requirement for the growth and profitability of organizations. It enhances technological provisions, product constituents, integrated software and consumer friendly as well as incorporating additional1useful features. The aim of this study was to examine the effect of financial innovations on profitability of commercial banks in Ethiopia. The researcher used exploratory research design and quantitative research approach was used. The independent variables were mobile banking user, internet banking user, agent banking, ATM machine, pos machine and dependent variable was profitability. Beside these, in the study firm size and bank age were used as control variables. The study uses only secondary source of data. The pooled regression model was used to analyze the relationship between financial innovation and profitability. Agent banking; age of the firm and bank size has positive and significant effect on return on equity while, ATM and posm has negative statistically significant effect on ROE. Only mobile banking has positive and significant effect on ROA while other has negative and significant effect on ROA except mobile banking. Moreover, pos and mobile banking has positive and significant effect on profitability that were measured in NIM while the remaining other variables has negative and significant effect on profitability (NIM). From the study, it can be concluded that investment and asset in pos machine terminal has negative and statistically significant impact on ROE and ROA. The asset of pos machine terminal has positive and significant impact on net interest margin. The asset of mobile banking increase profitability (NIM). From the findings it can be conclude that, the investment on internet banking has Positive effect on banks performance that was measured by ROE. The greater investment on ATMs deployment has negative effect on banks profitability and investment on deploying ATMS lead to increase banks performanceItem FACTORS AFFECTING THE QUALITY OF EXTERNAL AUDIT SERVICE: EVIDENCE FROM PRIVATE AUDIT FIRMS OF ETHIOPIA(WOLKITE UNIVERSITY, 2024-04) SEADA MOHAMMEDThis research delves into the determinants influencing external audit quality in Ethiopian private audit firms, concentrating on five pivotal dimensions of auditors' professional ethics :independence, competence, objectivity, integrity, and confidentiality of information. The study ,encompassing 120 private audit firms, adopts a mixed research methodology and employs ordinal logistic regression to analyze the intricate relationships between these ethical dimensions and the perceived Quality The researcher was employed a quantitative research method which allows gathering numerical data, measuring variables, predicting and using statistical procedures. To determine the relationship among the variables and to test the research hypothesis correlation and regression analysis method was used by meeting the ordinary least square (OLS) assumptions of the linear regression. The correlation analysis revealed significant positive associations between auditor competence, integrity, objectivity, confidentiality of information, and the overall external audit quality. The model's robust fit, within 88.4% explanation of variability in external audit quality, underscored the effectiveness of the selected determinants in predicting audit outcomes. Multiple linear regression analysis identifies competence and integrity as substantial predictors of external audit quality, supported by robust methodology as indicated by high R-square values and adherence to assumptions. In conclusion, this research highlights the crucial roles of auditor competence and integrity in external audit quality in Ethiopian private audit firms. While auditor independence showed no significant correlation, the study emphasizes context-specific factors. It offers valuable insights and practical recommendations for improving audit practices. Implementing these can enhance audit quality and the integrity of the profession in Ethiopia. The study recommended targeted improvements in auditor competence and integrity to enhance overall external audit quality in Ethiopia. Acknowledging limitations such as a focused scope and methodological constraints,6the research underscores the need for cautious interpretation of results while offering valuable sights for the improvement of auditing practices in the Ethiopian private sector. Keywords :Audit, Quality, Factor, Private firmsItem DETERMINANTS OF BANKS’ LIQUIDITY ON SELECTED COMMERCIAL BANKS IN ETHIOPIA(WOLKITE UNIVERSITY, 2024-05) GEREMEW TSEGAYE ADELAIn banking sector, liquidity has one of the major concerns for both public and privatecommercial banks. Therefore, achieving the maximum level of liquidity is considered as the ultimate goal of most CBs. The main objective of this study was to examine determinants of banks’ liquidity on selected commercial banks in Ethiopia. The study adopted descriptive andexplanatory research design with quantitative approach. The study used non - probability sampling method – purposive to select the CBE and five private banks with at least twenty five years of establishment. Data source was secondary balanced panel data of the CBE and the five private commercial banks in the period of 2011 to 2022 which was obtained from NBE. Descriptive statistics, Pearson correlation coefficient and multiple linear regression model were employed to analyze the quantitative data using E – view 9. The findings of the study revealed that ROA, GDP, INF, and RR have significant and positive effect on liquidity of both public and private CBs, whereas BS, LG, and NPL have significant and negative effect, however, AQ has no significant effect. In this regard, 74.16% of the variations in the liquidity of the banks were jointly accounted by the eight variables at 5% level of precision. Therefore, those significant determinant factors are crucial to maintain the optimal level of liquidity of the banks. Therefore, it is recommended that commercial banks in Ethiopia are better not only be concerned about internal structures, policies and procedures, but also on both the internal environment and the macroeconomic environment together along with the industry factors while developing their strategies to efficiently manage their liquidity position.Item THE DETERMINANT OF OPERATIONAL AND FINANCIAL SELF SUFFICIENCY AN EMPIRICAL EVIDENCE OF ETHIOPIA MICROFINANCE INSTITUTIONS(WOLKITE UNIVERSITY, 2024-05) MAHDER MARKOSOperational and financial self-sufficiency are tools to measure the self-sufficiency of MFI in Ethiopia. The main objective of this study was to identify the determinant of operational and financial self-sufficiency in Ethiopia. In order to achieve the research objectives, data was collected from a sample of nineteen MFI in Ethiopia over the period from 2013 to 2022. MFI internal and external factors of operational and financial variables were analyzed by using ordinary least square(OLS) multiple linear regression analysis in the balanced panel fixed effect regression model. The findings of the study help to MFI in their policy. The study also discovered that, number of active borrower, female borrower and age of MFI have positive and significant impact on operational self-sufficiency and debt to equity ratio and cost per borrower have negative and significant effect on operational self-sufficiency. Similarly the size of MFI, deposit mobilization and age of MFI have positive and significant effect on financial self-sufficiency and operational expense ratio has negative and significant effect on financial self-sufficiency however, Labor cost to total asset ratio and Average loan size per average borrower haves no statistically significant effect on the operational self-sufficiency and Cost per borrower, Labor cost to total asset ratio and inflation have not statically significant effect on financial self-sufficiency of MFI. Thus, the study suggests that MFI age and operational expense ratio have high impact on the MFI sustainability to compete with the other MFI therefore as possible reduce operational expense in the market.Item FACTORS AFFECTING INTEREST FREE BANKING IN ETHIOPIA: A CASE STUDY OF COMMERCIAL BANKS LOCATED SOUTH-WEST ADDIS ABABA(WOLKITE UNIVERSITY, 2021-07) FIKRU ASERABanking industry fosters economic growth through financial intermediation. Which helps in meeting a debtor with a creditor and perform host of other financial services. Ethiopia adopted Interest Free Banking window scheme in 2011 and Full-fledged interest-free banking by June, 2021 as alternative banking system in addition to conventional by considering substantial number of unbanked Muslims communities, which estimated more than 38 million or 33.8% of total population. The emergence of Interest free financial system has created a new dimension to the current economic models and financial developments. Hence, use of such innovations is highly appreciated even if its successes depend on the various internal and external factors. Therefore, this study aims to investigate the main factors affecting interest-free banking system. For these purposes, primary and secondary data were collected and analyzed by using descriptively and inferential statistics. Finally, the model suggests that Interest free banking has positive and strong relationships with internal and external factors of qualified and skilled human resource, creation of awareness to community, ,suitable and effective banking policy and procedure, effectiveness of existing banks, overall managerial efficiency, working with Sherian Verdict and Principle, Research and development(RD) while contradict with Treasury risk of liquidity and solvency. Finally, enhancing and enforcing standards of regulatory law, policy and procedure is advisable for all commercial banks to sustain all its strength, and to improve their limitation.Item ASSESSMENT OF WORKING CAPITAL MANAGEMENT PRACTICE IN FIKIR SPRING WATER(WOLKITE UNIVERSITY, 2023-05-15) AMANUEL SHUMYEThis study's primary objective was to assess the working capital management practice of FikerSpring Water, a privately owned company it locate Agena near Wolkite town. This study wasconducted by taking the whole target population as respondents (census method) For this study. primary data collection was done by the researcher. The student researcher gathered primary data sources through structured interviews with the finance manager and by distributing an open and closed-ended questionnaire to respondents. Primary data sources were analyzed and interpreted through descriptive research analysis using tables and percentages about working capital management practices in Fiker Spring Water. The researcher uses the descriptive method of data analysis. The finding of the study showed many strengths and weaknesses of the company (Fiker Spring Water). Finally, the finding of this paper showed that even if Fiker Spring Waterselects many appealing cash control, inventory control, and receivable management techniques its overall working capital management practice in recent periods is weak and require further work. The student researcher recommends that organization should think of hiring qualified personnel for the position of financial management in their organizations.