Ownership structure and financial performance: An emerging market study

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Abstract

The relationship between ownership structure and firm performance has attracted considerable research attention in corporate governance. Ownership structure has become a critical governance issue for corporate performance. The present study focuses on the impact of block family, and institutional block ownership structure on the performance of listed firms in Nigeria. The three hypotheses for the study sought to establish whether block family ownership, block ownership, and institutional block ownership have any impact on the performance of the selected firms. The sample size consists of 76 non-financial multinational companies listed on the Nigerian Exchange Group (NGX) between 2011 and 2020. The data for the study was obtained from the financial statements of the selected firms. Panel fixed (FE) and random effect (RE) regressions were used to analyse the relationship between ownership structure and financial performance measured by gross profit margin (GPM). The results of the study show a significant impact of all the examined ownership structure variations (block family ownership structure, block ownership and institutional block ownership structure) on the performance of non-financial companies in the emerging market (at p-value < 0.05). This finding is consistent with existing empirical studies and highlights the key role of family ownership and institutional ownership in shaping the performance of non-financial firms in Nigeria. This study makes two important contributions by advancing the debate on the relationship between ownership structure and business performance in emerging markets and by providing a tangible resource for policymakers to promote prudent ownership governance to enhance business performance and sustainability in emerging markets.

Keywords: Ownership Structure, Financial Performance, Family Businesses, Emerging Markets

Authors’ individual contribution: Conceptualization — N.C.N.-I.; Methodology — N.C.N.-I. and N.O.O.; Formal Analysis — N.C.N.-I., N.O.O., O.F.C.-N., and J.A.O.; Data curation — O.F.C.-N. and J.A.O.; Writing — N.C.N.-I. and N.O.O.; Supervision — N.C.N.-I.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D23, F23, G23, G32, L25

Received: 20.12.2024
Accepted: 31.03.2025
Published online: 03.04.2025

How to cite this paper: Nnaji-Ihedinmah, N. C., Okoroji, N. O., Cyril-Nwuche, O. F., & Onwuchekwa, A. J. (2025). Ownership structure and financial performance: An emerging market study. Corporate Ownership & Control, 22(1), 169–178. https://doi.org/10.22495/cocv22i1art14