Does ownership structure affect firm performance? Evidence from Nigerian listed companies

Abstract

This paper examines the relationship between ownership structure and firm performance from the perspective of listed Nigerian companies. The sample comprises 73 companies listed on the Nigerian Stock Exchange for which relevant financial data is available for the period 2001 to 2007. The empirical results obtained through ordinary least squares (OLS) analysis provide evidence which suggests that dominant shareholding, ownership concentration, and foreign ownership structures have no significant effect on firm performance. However, insider ownership is inversely related to firm performance. Two major policy implications emerge from the results of this study. First, since ownership structures such as, dominant shareholding, concentrated ownership, and foreign ownership have no significant effect on firm performance, government emphasis on them is misplaced. Second, insider ownership of Nigerian firms is to be monitored closely by shareholders due to the adverse effect of this ownership structure on firm performance.