It and Profitability Essay

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CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS OF THE MODEL
4.1 INTORDUCTION This chapter is composed of the analysis and presentation of the time series data collected for the analysis of effect of investment in Information and Communication Technology on bank performances (A case study of UNITED BANK FOR AFRICA PLC(UBA Plc))(2000-2009). Economic variables as stated in the previous chapter were analyzed through a regression analysis. After estimating the parameters of the regression line, series of tests will be carried out to find out if casual relationship do exists among the stated variables , if each independent variables was significant in influencing the dependent variables, if all the independent variables taken together were significant in influencing the dependent variable and if there is auto-correlation exists among the independent variables.

4.2 DATA PRESENTATION FOR THE MODEL
Tables 1: Time Series Data for the model (N’ millions)

YEARS | ICT | DPT | GE | PFT | 2000 | 1450 | 128460 | 20470 | 1990 | 2001 | 1500 | 130121 | 21527 | 2170 | 2002 | 1550 | 131866 | 22112 | 2238 | 2003 | 1600 | 142427 | 23720 | 4816 | 2004 | 1652 | 151929 | 23928 | 5608 | 2005 | 1680 | 205110 | 25506 | 6239 | 2006 | 1687 | 757407 | 86079 | 12514 | 2007 | 11470 | 897651 | 101106 | 26988 | 2008 | 11500 | 1258036 | 154330 | 54637 | 2009 | 11556 | 1151086 | 220467 | 22989 |
Sources: Annual Report and financial statement of United Bank of Africa.

4.3 REGRESSION RESULT FOR MODELS
4.3.1.1 REGRESSION RESULT FOR MODEL ONE VARIABLES Coefficient STD.Error t-statisticsC 89058.60 99433.01 0.895664DPT 91.36723 15.43380 5.919942 |
R² = 0.814
ADJUSTED R² = 0.791
S.E. OF REGRESSION = 221902.2
F-STATISTICS = 35.04571
DURBIN WASTON = 2.545666

4.3.1.2 MODEL PRESENTATION The result above is a product of a time series data for the values of ICT regressed on DPT. This is presented in a linear equation thus: BANK PERFORMANCE (DPT) = α0 + α1ICT + u
Which is as follows: DPT = 89058.60 + 91.36723 ICT + u (0.895664) (5.919942)
CIRCUMVENCE The parameter for ICT(investment in ICT) is negative, this does not conform to the apriori expectation that in Economic theory, that the higher the investment of ICT ,the higher the Bank Deposit(DPT).
4.3.1.3 INTERPRTATION OF RESULT
Co-efficient of determination(R²) is the overall measure of the goodness of fit. The R² value of 0.814 shows that, about 81% systematic variation in the dependent variable which is DPT(deposit) is jointly explained by variations in of the explanatory variable such as ICT(investment in information and communication technology). The remaining 19% variation in DPT is attributed to the Error term. Its means that the regression result is reliable.
The Adjusted Co-efficient of determination( adjusted R²) explains the goodness of fit which allows for degree of freedom. The adjusted R² allows us to compare equations with different explanatory variable and equally to determine one to one relationship adjusted R² and the residual variables. The higher the R² , the lower the residual variable. Here the adjusted R² is 0.791, the R² is high and the residual value is low. t- statistics (t-test) is obtained by the ratio of estimated parameter to the standard error of the parameter, therefore the t-test is a test to determine whether or not a given independent variable belongs to a particular variation. It is a good or reliable indicator of the dependent variable. To get the t-test tabulated, he level of significance is 5%, n is the number of observation(10), k is the number of parameter estimate(2). The degree of freedom is n-k (10-2) is 8. The t-tabulated is 1.86. The decision rule
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