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Purpose The paper investigates the effect of ownership structure on the financial distress of firms listed in sub-Saharan Africa. Design/methodology/approach Using secondary data from 106 non-financial firms listed in 9 selected SSA countries from 2016 to 2021, the research using paired t -tests and conditional logistic regression model analysed a sample of 174 distressed observations matched with 174 non-distressed observations. Findings T-tests determined significant differences between distressed and non-distressed groups concerning institutional, foreign, and local ownership. Conditional logistic results established that institutional, foreign, and state ownership significantly reduce distress. However, managerial ownership does not influence financial distress while a significant positive relationship is observed between local ownership and financial distress. Originality/value This is the first study to investigate the influence of ownership structure, including local ownership, on financial distress in SSA, employing a unique methodology of matched design and conditional logistic regression analysis. Furthermore, the paper presents cross-country evidence from emerging frontier markets, highlighting the importance of governance frameworks in firms’ stability.
Abdulkadir et al. (Sun,) studied this question.