Ownership Structure as a Determinant of Financial Performance: Evidence from Listed Manufacturing Firms in Nigeria

This study analyzed the ownership structures of manufacturing firms listed on Nigerian stock exchanges and how those structures affect the firms' financial performance. It evaluated the influence of concentrated, foreign, managerial, and institutional ownership, respectively, on return on assets (ROA), and it examined the collective influence of the four ownership types on ROA. The analysis was conducted within the boundaries of agency theory. Five hypotheses were tested at the 5% level. The research design employed was ex-post facto with a quantitative correlational approach. The population comprised the eight manufacturing firms listed on the Nigerian Exchange Group (NGX) in the sub-sectors of consumer and industrial goods, conglomerates, and basic materials, on 31st December 2024. Data were analyzed using descriptive statistics, Pearson and Spearman correlation, variance inflation factor (VIF) diagnostics, pooled ordinary least squares (OLS) regression, and panel fixed and random effects, with the Hausman specification test used to determine the more efficient panel estimator. The results indicated that concentrated ownership had a negative and significant impact on ROA (-B = 0.145, p < .001). Foreign ownership had a positive and significant impact on ROA (B = 0.143, p < .001), as did managerial ownership (B = -1.660, p < .001), and institutional ownership (B = 0.216, p = .001). The collective impact of the four ownership types on ROA was significant. Therefore, all five hypotheses were supported. This study examines the effect of different ownership structures on firm monitoring and financial performance in the case of manufacturing firms in Nigeria. It shows that adverse effects on monitoring and financial performance are competence of management ownership and over-concentrated ownership in the firm.