ABSTRACT

This study investigated the effect of ownership structure and financial performance of firms listed on the Nigerian Exchange Group. Data on four components of ownership structure (institutional ownership, ownership concentration, foreign ownership and managerial ownership) and two financial performance proxies (ROA and ROE) were extracted from published financial statements of 79 firms for a period of eleven years (2010 to 2020). Data on total assets and Debt to Equity ratio were also extracted and respectively used to moderate for firm size and control for financial leverage in the study. Expost facto and correlational research designs were adopted, while descriptive and inferential statistical techniques (correlation, panel data Generalized Method of Moments and Moderated Multiple Regression) were used in analyzing the data based on the outcome of various data screening and diagnostic tests. The results revealed that institutional ownership, managerial ownership and ownership concentration had significant effects on return on assets (ROA), while the effect of foreign ownership on ROA was insignificant. Findings also showed the four components of ownership structure as having significant effects on ROE while the moderation/ interaction effect of firm size on the relationship between ownership structure and the two financial performance proxies were shown to be positive but insignificant. The study concludes that ownership structure components substantially influences financial performance of listed firms in Nigeria regardless of their sizes and recommends amongst others that institutional ownership should be encouraged as it has significant positive trade off on financial performance of listed firms in Nigeria.