OWNERSHIP STRUCTURE AND CORPORATE FINANCIAL PERFORMANCE

Abstract

This study examines ownership structure and corporate financial performance. Data spanning 2016-2020 from all the 40 companies listed as financial service companies on the Nigerian stock exchange was used for empirical analysis. The ordinary least square and error correction model were devised. From empirical analysis, interpretation and test of hypotheses, a general outcome of the study indicates that the variables to measure ownership structure (ownership concentration; foreign ownership; managerial ownership and family ownership) have a significant impact on corporate financial performance of firms under study. More specifically the following findings were made from the study. Some recommendations from the study are; In addition to incentive pay, the shareholdings of managers should be encouraged as a good incentive mechanism to help the management and the shareholders to become united to promote the interest of both so that the managers will pay attention to the development of long-term interests of the company contributing to achievement of the contract objectives. The study also recommends that there is need for corporate entities quoted at the Nigerian Stock Exchange to have effect ownership structures. This will reduce incidence of poor performance and will ensure that directors are accountable to the shareholders with a ripple effect of improving investor confidence.