FINANCING STRATEGIES, OWNERSHIP STRUCTURE AND PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

With the monumental surge in the state of manufacturing companies in Nigeria, it is pertinent to
examine the moderating roles of financing strategies on the relationship between ownership
structure and performance of the manufacturing firms in Nigeria. This study examined the
relationship between ownership structure and performance of the manufacturing firms in Nigeria.
The ownership structure was proxied by institutional ownership, managerial ownership, foreign
ownership, and ownership concentration; the study also adopted the use of return on assets to
serve as a proxy for performance (dependent variable). The study also examined the moderating
roles of financing strategies on the relationship between ownership structure and the financial
performance of manufacturing firms in Nigeria. The study also employed the use of debt financing
to represent financing strategies (moderating variable). The study utilized secondary data that was
drawn from a sample of thirty-seven (37) manufacturing firms for a period of ten (10) years from
2014 to 2023. The study employed the utilization of descriptive statistics and correlation analysis,
as well as random-effect model regression for analyzing the data gathered for this study. The
findings showed that institutional ownership has a negative and insignificant effect on the return
on assets of listed manufacturing firms in Nigeria; managerial ownership has a significant and
negative effect on return on assets of listed manufacturing firms in Nigeria; similarly, foreign
ownership has a negative and significant effect on return on assets of listed manufacturing firms
in Nigeria. Moreover, ownership concentration has a positive but insignificant relationship with
return on assets of listed manufacturing firms in Nigeria, and financing strategies, which were
measured as debt financing, have a strong negative and significant relationship with the financial
performance of listed manufacturing firms in Nigeria. The study concludes that institutional
ownership, managerial ownership, foreign ownership had negative effect on return on assets of
listed manufacturing firms in Nigeria; while, ownership concentration has positive but
insignificant relationship with return on assets of listed manufacturing firms in Nigeria; and
financing strategies which was measured as debt financing does not have positive relationship
with return on assets of listed manufacturing firms in Nigeria. Therefore, the study recommends
that regulatory bodies in Nigeria should encourage more institutional involvement and
participation in investment to boost industrialization and to foster better sustainability in
operations in these firms and the economy at large.