EVALUATION OF THE EFFECTS OF INVESTMENTS IN INFORMATION TECHNOLOGY (IT) ON PRODUCTIVITY OF NIGERIAN BANKS

Abstract

The broad objective of this study was to evaluate the impact of investments in information technology (IT) on Nigerian banks while the specific objective was to evaluate the effects of investments in IT on overall productivity of Nigerian banks. The data for the study were sourced from the financial reports of some selected banks over a five year period (2000-2004). The statistical analysis tools used for the determination of the main objective of the study (i.e determination of the relationship between investments in IT and productivity) were: two stage least squares, ordinary least square and analysis of variance (ANOVA). When the loans, deposits and net income were taken as measures of output, R2 were 0.959 and 0.837; adjusted R2 were 0.955 and 0.8222 and were both significant (p<0.001). The conclusion drawn from the study was that investments in IT made positive contributions on overall output and it was an indication that, such investments can enhance efficient performance of workers in the banking sector.