OWNERSHIP STRUCTURE AND VALUE CREATION IN NIGERIAN COMMERCIAL BANKS

OKEZIE, STELLA OGECHUKWU
Department of Accounting, Micheal Okpara University of Agriculture, Umudike

The issue of governance plays a vital role in the overall wellbeing of an organization with
ownership structure being a focal point. In this study, we examined the impact of ownership
structure on value creation in Nigeria banks. Using the ex-post facto research design on panel
data spanning a ten-year period from 2010–2019 for five (5) banks listed on the Nigerian stock
exchange, the study examined the effect of a range of ownership structure such as directors’
ownership, institutional ownership and foreign ownership on shareholders’ value. The Fixed
effects model was adopted in evaluating the relationship. The econometric estimate showed
that Directors’ ownership has a positive but insignificant effect on shareholders’ fund of
Nigerian Commercial Banks. Secondly, Institutional and Foreign ownership has positive and
significant effect on shareholders’ fund. Conclusively, the findings indicate that ownership
structure does have significant impact on shareholders’ fund of Nigerian banks. We therefore,
recommend among other things that more institutions and foreign investments should be
encouraged to invest in the commercial banks in Nigeria. The potentials of these investments
should be utilize to improve value creation for the shareholders. Also the positive relationship
between directors’ ownership and shareholders’ fund should be harnessed appropriately to also
impact significantly on the value of the shareholders.
Keywords: Value Creation, Ownership Structure, Shareholders’ Fund, Investment,
Governance

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