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Managerial ownership and performance of listed non-financial firms in Nigeria

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  • Olufemi Bodunde Obembe
  • Clement Olalekan Olaniyi
  • Rosemary Olufunmilayo Soetan

Abstract

The ongoing debate relating to the impact of managerial ownership on performance of firms has centred on whether managerial ownership has an incentive or entrenchment effect on performance of firms. In addition, the debate has also been extended to whether a nonlinear estimation method is appropriate for modelling the relationship rather than the linear specification adopted by earlier scholars. This study examined these issues in the context of a developing country using generalised method of moment (GMM) estimation on 63 non-financial firms quoted on the Nigerian Stock Exchange between 1998 and 2010. Our study found that managerial ownership did not have any significant impact on the performance of firms in both the linear and nonlinear specifications. Factors impacting on firm performance include the first lag of performance which is return on assets (ROAs) and index of monopoly power. These two factors had a positive and significant impact on ROA and therefore we conclude that managerial ownership may be a weak mechanism for mitigating agency problems among firms listed on the Nigerian Stock Exchange.

Suggested Citation

  • Olufemi Bodunde Obembe & Clement Olalekan Olaniyi & Rosemary Olufunmilayo Soetan, 2016. "Managerial ownership and performance of listed non-financial firms in Nigeria," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 8(4), pages 446-461.
    • Handle: RePEc:ids:ijbema:v:8:y:2016:i:4:p:446-461
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    1. OMISORE, Segun & Ho, Manh-Toan, 2019. "Corporate Entrepreneurship, Strategy Formulation, and the Performance of the Nigerian Manufacturing Sector," Thesis Commons u39nc, Center for Open Science.
    2. Clement Olalekan Olaniyi & Titus Ayobami Ojeyinka & Xuan Vinh Vo & Mamdouh Abdulaziz Saleh Al‐Faryan, 2023. "Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 525-544, January.
    3. Ozili, Peterson K, 2020. "Corporate governance research in Nigeria: a review," MPRA Paper 98217, University Library of Munich, Germany.
    4. Peterson K. Ozili, 2021. "Corporate governance research in Nigeria: a review," SN Business & Economics, Springer, vol. 1(1), pages 1-32, January.
    5. Clement Olalekan Olaniyi & Olufemi Bodunde Obembe & Emmanuel Oluwole Oni, 2017. "Analysis of the Nexus between CEO Pay and Performance of Non-Financial Listed Firms in Nigeria," African Development Review, African Development Bank, vol. 29(3), pages 429-445, September.

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