Moderating effect of Board Size on Ownership Structure and Financial Performance of Quoted Consumer firms in Nigeria
Main Article Content
Abstract
Ownership concentration is the stake of shares held by the shareholders with the controlling interest in a firm. This study examines the Moderating effect of Board Size on Ownership Structure and Financial Performance of Quoted Consumer firms in Nigeria. The population comprised all the 21 quoted consumer goods manufacturing firms in Nigeria while the filtering technique was used to arrive at a sample size of seventeen (17) consumer goods manufacturing firms in Nigeria. The hypotheses were tested using a robust fixed effect regression model after conducting some diagnostics tests. The results shows that share ownership concentration has a significant negative effect on the return on assets of quoted consumer goods manufacturing firms in Nigeria while Further results based on the second model indicate that board size significantly moderates the relationship between share ownership concentration and return on assets of quoted consumer goods manufacturing firms in Nigeria. The study recommends that the board of directors of consumer goods firms should minimize the level of share ownership concentration in their firms to the maximum of 60% to encourage dilution of ownership and enhance the financial performance of their firms in Nigeria.
Article Details
How to Cite
Sunday, O. S., Aneke Charles Amobi, & Chidinma Martha Dimgba. (2024). Moderating effect of Board Size on Ownership Structure and Financial Performance of Quoted Consumer firms in Nigeria. Matondang Journal, 4(1), 15-26. https://doi.org/10.33258/matondang.v4i1.1219
Section
Articles
References
Abdulrahman, B. S., & Musa, U. M. (2020). Determinants of financial performance of listed consumer goods firms in Nigeria. Ae-Funai Journal of Accounting, Business and Finance, 6(1), 255-265.
Abid, G., Khan, B., Rafiq, Z., & Ahmed, A. (2014). Theoretical perspective of corporate governance. Bulletin of Business and Economics, 3(4), 166-175.
Ajao, M. G., & Ejokehuma, Z. O.(2020). The effect of ownership concentration on financial performance of manufacturing firms in Nigeria, African Journal of Management, 5(3), 60-78.
Alhassan, I., & Mamuda. A. U. (2020). Ownership structure and financial performance of quoted consumer goods manufacturing firms. International Journal of Accounting Research, 5(4), 116-124.
Ali, M. S., Riaz, L., & Anis, W. (2021). Comparative study on the impact of individual and institutional ownership on firm performance: Evidence from Pakistan Stock Exchange. Journal of Humanities, Social and Management Sciences (JHSMS), 2(2), 150-167.
Alipour, M., & Amjadi, H. (2011). The effect of ownership structure on corporate
Amneh, A., Amneh, H., Hussam, T., & Mahmoud, E. (2021). Ownership structure’s effect on financial performance: An empirical analysis of Jordanian listed firms. Cogent Business and Management, 8(1), 1-21.
Balatbat, M., Taylor, S., & Walter, T. (2004). Corporate governance, insider ownership and operating performance of Australian initial public offerings. Accounting and Finance, 44(1), 299-328.
Benjamin, K., Love, O., & Kabiru, I. (2014). Impact of ownership structure on the financial performance of listed insurance firms in Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(1), 409-416.
Berle, A., & Means, G. (1932). The modern corporate and private property. McMillian.
César, C. Z., Beatriz, F. J., Alba, P. D., & Sergio, C. H. (2020). Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms. International Entrepreneurship and Management Journal, 16(1), 1393–1426.
Corporate Finance, 7(3), 209–233.
Demsetz, H., & Lehn, K. (2001). Ownership structure and corporate performance. Journal of
deposit money banks in Nigeria. Journal of Accounting and Management, 8(2),29-38.
Drakos, A. A., & Bekiris, F. V. (2010). Endogenuity and the relationship between board structure and firm performance: a simultaneous equation analysis for the Athens Stock Exchange", Managerial and Decision Economics, 31(6), 387-401.
Fama, E. F. (1980). Agency problems and the theory of the firm. The Journal of Political economy, 88(2), 288-307.
Gleason, C. A. (2000). Audit committee characteristics and executive committee characteristic and firm performance in Oman: Empirical Study. Asian Social Science, 10(12), 98-113.
Henry, D. (2010).Agency costs, ownership structure, and corporate governance compliance: A private contracting perspective. Pacific Basin Finance Journal, 18(1), 24-46.
Ironkwe, U. I, & Emefe, P. (2019). Corporate ownership structure on financial performance of quoted companies in Nigeria. Journal of Accounting Information and Innovation, 5(1), 67- 87.
Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behaviour, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Kechi, K. (2011). Linking corporate governance with organizational performance: New insights and evidence from Nigeria, Global Journal of Management and Business Research, 11(12), 1-13.
Khadijat, Y., & Rodiat, L. (2018). Effect of ownership structure on financial performance of
L’Huillier, B. M. (2014). What does "corporate governance" actually mean? Corporate Governance, 14(3), 300-319.
Lawal, O. D., Agbi, E. S., & Mustapha, L. O. (2018). Effect of ownership structure on financial performance of listed insurance firms in Nigeria. Journal of Accounting, Finance and Auditing Studies, 4(3), 123-148.
Murtaza, S., Noor-Ud-Din, A., Aguir, A., & Batool, S. (2020). The role of ownership concentration and dividend policy on firm performance: Evidence from an emerging market of Pakistan. SEISENSE Journal of Management, 3(2), 1-13.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
Obaje, F. O., Abdullahi, S. R., & Ude, A. O. (2021). Moderating effect of firm size on the relationship between board structure and firm financial performance. Journal of Good Governance and Sustainable Development in Africa (JGGSDA), 6(3), 97-117.
Pathirawasam, C. (2013). Internal factors which determine financial performance of firms: With special reference to ownership concentration. http://www.slu.cz/opf/cz/informace/acta-acamica-karviniensia.
Pavel, K. & Alexander, M. (2001). Ownership structure and firm performance in Russia: The case of blue chips of the Stock Market. Economics Education and Research Consortium, Russia.
Performance of listed companies in Tehran stock exchange: An empirical evidence of Iran, International Journal of Business and Social Science, 2(13), 49-55.
Sahut, J. M., & Gharbi, O. H. (2010). Institutional investors’ typology and firm performance: The case of French firms. International Journal of Business, 15(1), 34-52.
Saidu, S. A., & Gidado, S. (2018). Managerial ownership and financial performance of listed manufacturing firms in Nigeria. International Journal of Academic Research in Business And Social Sciences, 8(9), 27-43.
Samuel, B. A., Yakubu, A. A., & Olumuyiwa, A. (2018). Ownership structure and financial performance of quoted building materials firm in Nigeria. International Journal of Research and Innovation in Social Science,2(12), 476-484.
Saseela, B. (2017). Ownership structure and financial performance of listed beverage food and tobacco companies. International Journal of Accounting and Financial Reporting, 7(2), 36-47.
Shah, A. Z. R., Butt, A. S., & Saeed, M. M. (2011). Ownership structure and performance of firms: Empirical evidence from an emerging market. African Journal of Busines Management 5(2), 515-523.
Shohreh, H., Seyedeh F., Mir, R. & Armin S. (2015). Investigating the relationship between Institutional ownership with financial policies and Financial Performance of listed companies in Tehran Stock Exchange. Singaporean Journal of Business Economics, And Management Studies 3(4), 11-25.
Stanley, J. I. (2015). An assessment of the impact of ownership structure on financial Performance of quoted Chinese Banks. Journal of Management Science and Business Administration, 1(3), 26-33.
Usman, M. (2019). The impact of capital structure on financial performance of consumer goods industry in Nigeria. Open Journal of Accounting, 8(9), 47-62.
Uwalomwa, O., & Olamide, O. (2012). An empirical examination of the relationship between ownership structure and the performance of firms in Nigeria. International Business Research, 5(1), 208-214.
Wang, W. (2003). Ownership structure and firm performance: Evidence from Taiwan. Asia Pacific Management Review, National Kung University, 8(2), 135-160.
Yudastio, F. G. D., & Usep, S. (2020). Analysis of influence of family ownership towards performance of the company. International Journal for Innovation Education and Research, 8(8), 432-444.
Abid, G., Khan, B., Rafiq, Z., & Ahmed, A. (2014). Theoretical perspective of corporate governance. Bulletin of Business and Economics, 3(4), 166-175.
Ajao, M. G., & Ejokehuma, Z. O.(2020). The effect of ownership concentration on financial performance of manufacturing firms in Nigeria, African Journal of Management, 5(3), 60-78.
Alhassan, I., & Mamuda. A. U. (2020). Ownership structure and financial performance of quoted consumer goods manufacturing firms. International Journal of Accounting Research, 5(4), 116-124.
Ali, M. S., Riaz, L., & Anis, W. (2021). Comparative study on the impact of individual and institutional ownership on firm performance: Evidence from Pakistan Stock Exchange. Journal of Humanities, Social and Management Sciences (JHSMS), 2(2), 150-167.
Alipour, M., & Amjadi, H. (2011). The effect of ownership structure on corporate
Amneh, A., Amneh, H., Hussam, T., & Mahmoud, E. (2021). Ownership structure’s effect on financial performance: An empirical analysis of Jordanian listed firms. Cogent Business and Management, 8(1), 1-21.
Balatbat, M., Taylor, S., & Walter, T. (2004). Corporate governance, insider ownership and operating performance of Australian initial public offerings. Accounting and Finance, 44(1), 299-328.
Benjamin, K., Love, O., & Kabiru, I. (2014). Impact of ownership structure on the financial performance of listed insurance firms in Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(1), 409-416.
Berle, A., & Means, G. (1932). The modern corporate and private property. McMillian.
César, C. Z., Beatriz, F. J., Alba, P. D., & Sergio, C. H. (2020). Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms. International Entrepreneurship and Management Journal, 16(1), 1393–1426.
Corporate Finance, 7(3), 209–233.
Demsetz, H., & Lehn, K. (2001). Ownership structure and corporate performance. Journal of
deposit money banks in Nigeria. Journal of Accounting and Management, 8(2),29-38.
Drakos, A. A., & Bekiris, F. V. (2010). Endogenuity and the relationship between board structure and firm performance: a simultaneous equation analysis for the Athens Stock Exchange", Managerial and Decision Economics, 31(6), 387-401.
Fama, E. F. (1980). Agency problems and the theory of the firm. The Journal of Political economy, 88(2), 288-307.
Gleason, C. A. (2000). Audit committee characteristics and executive committee characteristic and firm performance in Oman: Empirical Study. Asian Social Science, 10(12), 98-113.
Henry, D. (2010).Agency costs, ownership structure, and corporate governance compliance: A private contracting perspective. Pacific Basin Finance Journal, 18(1), 24-46.
Ironkwe, U. I, & Emefe, P. (2019). Corporate ownership structure on financial performance of quoted companies in Nigeria. Journal of Accounting Information and Innovation, 5(1), 67- 87.
Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behaviour, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Kechi, K. (2011). Linking corporate governance with organizational performance: New insights and evidence from Nigeria, Global Journal of Management and Business Research, 11(12), 1-13.
Khadijat, Y., & Rodiat, L. (2018). Effect of ownership structure on financial performance of
L’Huillier, B. M. (2014). What does "corporate governance" actually mean? Corporate Governance, 14(3), 300-319.
Lawal, O. D., Agbi, E. S., & Mustapha, L. O. (2018). Effect of ownership structure on financial performance of listed insurance firms in Nigeria. Journal of Accounting, Finance and Auditing Studies, 4(3), 123-148.
Murtaza, S., Noor-Ud-Din, A., Aguir, A., & Batool, S. (2020). The role of ownership concentration and dividend policy on firm performance: Evidence from an emerging market of Pakistan. SEISENSE Journal of Management, 3(2), 1-13.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
Obaje, F. O., Abdullahi, S. R., & Ude, A. O. (2021). Moderating effect of firm size on the relationship between board structure and firm financial performance. Journal of Good Governance and Sustainable Development in Africa (JGGSDA), 6(3), 97-117.
Pathirawasam, C. (2013). Internal factors which determine financial performance of firms: With special reference to ownership concentration. http://www.slu.cz/opf/cz/informace/acta-acamica-karviniensia.
Pavel, K. & Alexander, M. (2001). Ownership structure and firm performance in Russia: The case of blue chips of the Stock Market. Economics Education and Research Consortium, Russia.
Performance of listed companies in Tehran stock exchange: An empirical evidence of Iran, International Journal of Business and Social Science, 2(13), 49-55.
Sahut, J. M., & Gharbi, O. H. (2010). Institutional investors’ typology and firm performance: The case of French firms. International Journal of Business, 15(1), 34-52.
Saidu, S. A., & Gidado, S. (2018). Managerial ownership and financial performance of listed manufacturing firms in Nigeria. International Journal of Academic Research in Business And Social Sciences, 8(9), 27-43.
Samuel, B. A., Yakubu, A. A., & Olumuyiwa, A. (2018). Ownership structure and financial performance of quoted building materials firm in Nigeria. International Journal of Research and Innovation in Social Science,2(12), 476-484.
Saseela, B. (2017). Ownership structure and financial performance of listed beverage food and tobacco companies. International Journal of Accounting and Financial Reporting, 7(2), 36-47.
Shah, A. Z. R., Butt, A. S., & Saeed, M. M. (2011). Ownership structure and performance of firms: Empirical evidence from an emerging market. African Journal of Busines Management 5(2), 515-523.
Shohreh, H., Seyedeh F., Mir, R. & Armin S. (2015). Investigating the relationship between Institutional ownership with financial policies and Financial Performance of listed companies in Tehran Stock Exchange. Singaporean Journal of Business Economics, And Management Studies 3(4), 11-25.
Stanley, J. I. (2015). An assessment of the impact of ownership structure on financial Performance of quoted Chinese Banks. Journal of Management Science and Business Administration, 1(3), 26-33.
Usman, M. (2019). The impact of capital structure on financial performance of consumer goods industry in Nigeria. Open Journal of Accounting, 8(9), 47-62.
Uwalomwa, O., & Olamide, O. (2012). An empirical examination of the relationship between ownership structure and the performance of firms in Nigeria. International Business Research, 5(1), 208-214.
Wang, W. (2003). Ownership structure and firm performance: Evidence from Taiwan. Asia Pacific Management Review, National Kung University, 8(2), 135-160.
Yudastio, F. G. D., & Usep, S. (2020). Analysis of influence of family ownership towards performance of the company. International Journal for Innovation Education and Research, 8(8), 432-444.