Ownership Identity and Earnings on Investment of Listed Entities in Nigeria

Edwin Fashola 1 , John U. Ihendinihu 2 & Chidinma E. Ezeigbo 3
Department of Accounting,
College of Management Sciences,
Michael Okpara University of Agriculture, Umudike, Abia State.
1 edwinfash@yahoo.com, 2 ihendinihu.john@gmail.com & 3 chidinmaezeigbo@yahoolcom

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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