Simulation Models and Corporate Financial Planning of Banks in Bayelsa State, Nigeria

Abstract

This paper examines the application of simulation models in corporate financial strategy of banks in Bayelsa State, Nigeria. To achieve the objective of this paper, primary and secondary sources of data was used. The primary data was obtained from a well structured questionnaire of three sections with a reliability of 78% that was administered to one hundred and twelve (112) bank officials in Bayelsa State, Nigeria and secondary data was obtained from relevant books, journals and internet materials. The primary data collected was analysed using relevant econometric tools of Breusch-Godfrey Serial Correlation test, White Heteroskedasticity test, Ramsey RESET test, ADF and multiple regression. The analysis reveals simulation model is significantly related to shareholders satisfaction, customer service and return on capital employed. Hence, the paper concluded that simulation models provide relevant, reliable and sufficient information for organizations to achieve short, medium and long term objectives. Therefore, recommendations were provided for improve the application of simulation models.

Keywords: Simulation model, Agent based model, System based model, Corporate planning, financial strategy.