Ownership Structure, Firm Size and Corporate Value of Listed Deposit Money Banks in Nigeria

Abstract

This study investigates the effect of ownership structure and firm size on corporate performance of listed deposit money banks in Nigeria, using Return on Assets (ROA) as an accounting-based proxy for internal corporate value/performance. Panel data covering twelve listed deposit money banks over the 2015–2024 period was analysed using an ex-post facto research design and secondary data sourced from audited annual reports, the Nigerian Exchange Group. Ownership structure was decomposed into ownership concentration, managerial ownership, institutional ownership, and foreign ownership, while firm size was introduced as a control variable. Descriptive statistics, correlation analysis, panel unit root tests, Pedroni panel cointegration tests, Error Correction Model (ECM), and Fully Modified Ordinary Least Squares (FMOLS) estimators were employed to capture both short-run dynamics and long-run relationships. Empirical findings revealed that ownership structure variables exert not statistically significant short-run effect on ROA, while firm size has a negative and significant short run impact on ROA. This indicates a negative and significant short-run impact, indicating possible scale-related inefficiencies. In the long-run, managerial ownership and institutional ownership exhibit positive and statistically significant effects on ROA, supporting agency theory predictions that enhanced managerial alignment and institutional monitoring improve operational efficiency. Ownership concentration, foreign ownership, and firm size remain statistically insignificant in the long-run. The study concludes that governance quality, rather than ownership concentration or asset size, is critical to sustaining corporate performance in Nigeria’s banking sector. This study therefore recommends that listed deposit money banks (DMBs) should strengthen managerial and institutional equity participation to enhance long-term performance and financial stability.