A Moderating Effect of Financial Performance in a Relationship Between Ownership Structure and Firm Performance of Listed Commercial Banks in Nigeria

Abstract

In order to better understand the moderating impacts of financial performance, this article looks at the relationship between ownership structure and firm performance of Nigerian listed commercial banks. Data on ownership structure and yearly financial reports at the firm level from 2013 to 2022 are used in the empirical analysis. Panel regression analysis methods. Block share ownership and foreign share ownership were employed in this study as independent variables, while ROA was used as a leveraged moderating effect to quantify business performance. Descriptive research and correlational research design are thus employed in this study as suitable research designs. The results indicate that around 47% of all shareholders have shares held by shareholders who possess at least 5% of the company, which is a proxy for block ownership of common shares across commercial banks in Nigeria. The foreign share ownership mean is 22.65%, with a standard deviation of 3.93%, a minimum value of 0%, and a maximum value of 1%, respectively. This indicates a sharp decline in foreign investment as a result of the unpredictability of the market and the high level of insecurity that permeates the nation. The return on assets of the commercial banks that are quoted is positively and significantly impacted by foreign ownership; a rise of one unit in the variable results in a 4.0% return on assets. At the 1% significant level, leverage mediated the association between the dependent and independent variables (FSO*LEV and BSO*LEV). The study suggested using a non-linear model to explore the hypothesis that a firm's performance could affect its ownership structure and to estimate the impact of block ownership on firms' performance.