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The Impact of Ownership Structure on the Financial Performance of Listed Insurance Firms in Nigeria

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Author Info

  • Benjamin Kumai Gugong

    ()

  • Love O. Arugu

    ()

  • Kabiru Isa Dandago

    ()

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    Abstract

    This paper examines the impact of ownership structure on the financial performance of listed insurance firms in Nigeria. The study uses panel data for seventeen (17) firms for the period 2001–2010 (10 years). There are several aspects and dimensions of corporate governance, which may influence a firm’s performance but this study focuses on two aspects of ownership structure: namely managerial and institutional shareholding. Firm’s performance has been measured through Return on Asset (ROA) and Return on Equity (ROE). Findings indicate that there is a positive significant relationship between ownership structure and firm’s performance as measured by ROA and ROE. This paper recommends that the code on owner's equity of listed insurance companies should be sustained and encouraged so that the firms can have a perpetual life, because the stake of this owners could serve as a check and balance mechanism to further strengthen the corporate governance of the insurance firms in order to give room for enhanced financial performance of the listed insurance companies in Nigeria.

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    File URL: http://hrmars.com/hrmars_papers/Article_46_The_Impact_of_Ownership_Structure.pdf
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    Bibliographic Info

    Article provided by Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences in its journal International Journal of Academic Research in Accounting, Finance and Management Sciences.

    Volume (Year): 4 (2014)
    Issue (Month): 1 (January)
    Pages: 409-416

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    Handle: RePEc:hur:ijaraf:v:4:y:2014:i:1:p:409-416

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    Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal

    Related research

    Keywords: Ownership structure; Firm Performance; Institutional Shareholding; Managerial Shareholding; Listed Insurance Firms;

    References

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    1. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
    2. Jay C. Hartzell & Laura T. Starks, 2003. "Institutional Investors and Executive Compensation," Journal of Finance, American Finance Association, vol. 58(6), pages 2351-2374, December.
    3. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1034-1062.
    4. Farshid Navissi & Vic Naiker, 2006. "Institutional ownership and corporate value," Managerial Finance, Emerald Group Publishing, vol. 32(3), pages 247-256.
    5. Craswell, Allen T. & Taylor, Stephen L. & Saywell, Richard A., 1997. "Ownership structure and corporate performance: Australian evidence," Pacific-Basin Finance Journal, Elsevier, vol. 5(3), pages 301-323, July.
    6. Slovin, Myron B & Sushka, Marie E, 1993. " Ownership Concentration, Corporate Control Activity, and Firm Value: Evidence from the Death of Inside Blockholders," Journal of Finance, American Finance Association, vol. 48(4), pages 1293-1321, September.
    7. Claudio Loderer & Urs Peyer, 2002. "Board Overlap, Seat Accumulation and Share Prices," European Financial Management, European Financial Management Association, vol. 8(2), pages 165-192.
    8. Jarrell, Gregg A. & Poulsen, Annette B., 1988. "Dual-class recapitalizations as antitakeover mechanisms : The recent evidence," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 129-152, January.
    9. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
    10. Agrawal, Anup & Knoeber, Charles R., 1996. "Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 31(03), pages 377-397, September.
    11. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
    12. Mehran, Hamid, 1995. "Executive compensation structure, ownership, and firm performance," Journal of Financial Economics, Elsevier, vol. 38(2), pages 163-184, June.
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