DETERMINANTS OF CAPITALIZATION AMONG RICE PROCESSING ENTERPRISE IN EBONYI STATE, NIGERIA

The study investigated the determinants of capitalization among rice processing enterprise in Ebonyi State, Nigeria. It specifically analysed the level of capitalization in the rice processing enterprise and estimated the determinants of capitalization among the processors. Data were collected using well-structured questionnaire, administered to one hundred and twenty respondents that constitute the sample size for the study. Data analysis involved descriptive statistics such as frequency concept and ordinary least square model. It was observed that that processors are medium-sized since none of them were able to invest more than N1,000,000. The double-log form was chosen as the lead equation. The F-ratio was statistically significant at 1% probability level indicating high goodness of fit of the regression line. The R-2 of 0.788 shows that about 78.8% changes in the investment of the rice processors were accounted for by changes in the explanatory variables included in the model while the remaining 21.2% was accounted for by error. The result shows that age, education, experience and off-firm income were positively related to the amount of capital invested by rice processors and negatively related to nature of ownership and capital input. The study therefore recommended that government and non-governmental organization should provide necessary incentives for rice processors such as loans and other credit facilities so as to improve the efficient and productivity of the processors.