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Bank-Specific Attributes and Earnings Management in Nigerian Deposit Money Banks: The Moderating Role of Fintech Adoption
Subject area: Management and Commerce · Area of research: Financial Technology
DOI: https://doi.org/10.64388/IREV9I11-1717476
Abstract
This study examines whether bank-specific attributes influence earnings management in Nigerian deposit money banks and whether fintech intensity alters that relationship. Using a balanced panel of 50 bank-year observations drawn from five leading Nigerian banks Access Bank, First Bank, GTCO, UBA and Zenith Bank over 2015-2024, the study estimates bank fixed-effects regressions with heteroskedasticity-robust (HC3) standard errors. The empirical design uses two pre-computed earnings-management proxies supplied in the dataset (EM1 and EM2) to reduce dependence on a single measure. Bank-specific attributes are represented by bank size, leverage, capital ratio, profitability and loan intensity, while fintech intensity captures the extent of digital-finance adoption. Because leverage and capital ratio are mechanically collinear in the sample, the study estimates alternative specifications rather than forcing both ratios into the same model. The results show that bank-specific attributes jointly explain earnings management in the Nigerian banking context, with the strongest and most stable effect coming from bank size. Larger banks exhibit significantly higher values of both earnings-management proxies, while leverage is negatively associated with earnings management and capital ratio is positively associated with it when each is estimated in a separate specification. Profitability and loan intensity do not display robust standalone effects. Fintech intensity has a statistically insignificant direct association with earnings management, and the interaction terms between fintech intensity and the bank-specific attributes are uniformly insignificant. The evidence therefore suggests that, within the study window, fintech adoption in Nigerian deposit money banks has not yet matured into a sufficiently strong monitoring technology to systematically discipline earnings management. The paper contributes to the earnings-management literature by integrating banking attributes with digital transformation, by providing Nigeria-specific evidence grounded in actual bank-year data, and by showing that digitalization should not be assumed to automatically improve reporting discipline without complementary governance, risk and reporting controls.
Keywords
Earnings Management, Fintech Intensity, Bank Size, Leverage, Capital Ratio, Profitability, Loan Intensity, Nigerian Deposit Money Banks
How to cite this paper
@article{1717476,
author = {Rita Okonkwo},
title = {Bank-Specific Attributes and Earnings Management in Nigerian Deposit Money Banks: The Moderating Role of Fintech Adoption},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {11},
pages = {1103-1118},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1717476.pdf},
abstract = {This study examines whether bank-specific attributes influence earnings management in Nigerian deposit money banks and whether fintech intensity alters that relationship. Using a balanced panel of 50 bank-year observations drawn from five leading Nigerian banks Access Bank, First Bank, GTCO, UBA and Zenith Bank over 2015-2024, the study estimates bank fixed-effects regressions with heteroskedasticity-robust (HC3) standard errors. The empirical design uses two pre-computed earnings-management proxies supplied in the dataset (EM1 and EM2) to reduce dependence on a single measure. Bank-specific attributes are represented by bank size, leverage, capital ratio, profitability and loan intensity, while fintech intensity captures the extent of digital-finance adoption. Because leverage and capital ratio are mechanically collinear in the sample, the study estimates alternative specifications rather than forcing both ratios into the same model. The results show that bank-specific attributes jointly explain earnings management in the Nigerian banking context, with the strongest and most stable effect coming from bank size. Larger banks exhibit significantly higher values of both earnings-management proxies, while leverage is negatively associated with earnings management and capital ratio is positively associated with it when each is estimated in a separate specification. Profitability and loan intensity do not display robust standalone effects. Fintech intensity has a statistically insignificant direct association with earnings management, and the interaction terms between fintech intensity and the bank-specific attributes are uniformly insignificant. The evidence therefore suggests that, within the study window, fintech adoption in Nigerian deposit money banks has not yet matured into a sufficiently strong monitoring technology to systematically discipline earnings management. The paper contributes to the earnings-management literature by integrating banking attributes with digital transformation, by providing Nigeria-specific evidence grounded in actual bank-year data, and by showing that digitalization should not be assumed to automatically improve reporting discipline without complementary governance, risk and reporting controls.},
keywords = {Earnings Management, Fintech Intensity, Bank Size, Leverage, Capital Ratio, Profitability, Loan Intensity, Nigerian Deposit Money Banks},
month = {May},
doi = {https://doi.org/10.64388/IREV9I11-1717476}
}