CONSTRUCTS OF OWNERSHIP STRUCTURE AND THE FINANCIAL PERFORMANCE OF LISTED CORPORATE ENTITIES: A CANONICAL CORRELATION AND MULTIVARIATE ANALYSES
CONSTRUCTS OF OWNERSHIP STRUCTURE AND THE FINANCIAL PERFORMANCE OF LISTED CORPORATE ENTITIES: A CANONICAL CORRELATION AND MULTIVARIATE ANALYSES

Summary/Abstract: This study assessed the associated link between constructs of ownership structure and indicators of firms’ financial performance. Specifically, the study sought to examine the statistical link between performance measures and managerial ownership, institutional ownership, government ownership, family ownership, foreign ownership and CEO ownership. The performance measures of interest are return on asset, return on equity, earnings per share, Tobin’s Q and revenue growth. Secondary data were sourced from 28listed firms in the financial service sector (bank and non-bank institutions). The data covered 10 year period, spanning from 2009 – 2018. Models were developed in line with the hypothesis of the study and analysis was done using the canonical correlation and multivariate regression analyses amongst others. Overall, while we observed from the tests of canonical correlations that measures of ownership structure influenced the indicators of firms’ performance, the result of the multivariate regression analysis further revealed that the influence which constructs of ownership structure had on Return on Assets (ROA), Earnings Per Share (EPS), and Tobin’s Q were significant; whereas, the influence on Return on Equity (ROE) and revenue growth were not significant. With this, we recommend amongst others that since foreign ownership recorded a positive and significant relationship with all measures of performance, companies should map out strategies to woo foreign investors into investing in their respective shares, possibly through private placements and other probable means.

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