Ownership Identity and Earnings on Investment of Listed Entities in Nigeria

AGRAG 030

Ownership Identity and Earnings on Investment of Listed Entities in Nigeria Edwin Fashola1, John U. Ihendinihu2 & Chidinma E. Ezeigbo3

Department of Accounting, College of Management Sciences,

Michael Okpara University of Agriculture, Umudike, Abia State.

1edwinfash@yahoo.com, 2ihendinihu.john@gmail.com 3chidinmaezeigbo@yahoolcom

Abstract

The study examines the effect of ownership identity on investors’ earnings of listed entities in Nigeria. Panel data on foreign, institutional and managerial ownership identities, as well as firm size and earnings per share were extracted from published financial statements of 16 listed companies in Nigeria for the period 2010 to 2019. Based on the outcome of pre-estimation diagnostics, Panel Ordinary Least Squares regressions were fitted. The Fixed Effect model, selected based on the outcome of the Hausman test, indicates that foreign and institutional ownership identities have significant and positive effects on the earnings per share of listed companies in Nigeria, while managerial ownership has negative and insignificant effect on earnings. Results further indicate that firm size has a positive and significant controlling influence on the relationship between ownership identity and the earnings of listed entities in Nigeria. The paper concludes that foreign and institutional shareholders have the capacity to instill financial discipline and prudence in corporate resource management and recommends that listed entities in Nigeria should attract foreign and institutional investors into ownership of the companies with resultant positive tradeoffs on earnings.

Keywords: Ownership identity, foreign ownership, institutional investment, managerial

ownership, and earnings per share

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