Ownership Structure and Financial Performance of quoted Food and Beverage Firms in Nigeria

Abstract

The study examined the effect of the ownership structure and its dimensions (such as managerial ownership, employee ownership and private ownership) on the financial performance of eighteen food and beverage quoted firms on the Nigerian Stock Exchange (NSE) during the period 2010-2018. The study used secondary data on managerial ownership (MO), employee ownership (EO), private ownership (PO) and return on equity (ROE). These were sourced from the annual report and accounts of the firms used for the study. Data collected were analysed using pooled regression, fixed and random effect regression. The result showed that managerial ownership had an insignificant (positive) effect on return on equity (t=1.63; P=0.329; P>0.05). Employee ownership had significant positive effect on return on equity (t=2.19; P=0.001; P<0.05). Private ownership had significant effect on return on equity (t=3.2; P=0.005; P<0.05). Managerial ownership, employee ownership and private ownership had a significant combined effect on return on equity (Wald Chi²=32.91; R²=0.682; P=0.000). The study concluded that ownership structure had a significant effect on the financial performance of quoted food and beverage manufacturing firms in Nigeria.

Keywords: Ownership Structure, Managerial Ownership, Employee Ownership, Private Ownership, Financial Performance, Return on Equity.