IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025issue-9p9579-9594.html

Moderating Effect of Ownership Concentration on the Relationship between Financial Leverage and Tax Burden on Financial Sustainability of Listed Manufacturing Firms in Nigeria

Author

Listed:
  • Aronokhale, Ikwegiode Isaiah

    (Department of Accounting, Bingham University Karu, Nasarawa State)

  • Jacob Ojobo Ame

    (Department of Accounting, Bingham University Karu, Nasarawa State)

  • Orbunde, Bemshima

    (Department of Accounting, Bingham University Karu, Nasarawa State)

Abstract

The performance of the Nigerian manufacturing sector has been unimpressive with an average annual growth of 3.4% in 2021 and 1.38% in 2022, aggravating  the sector’s  poor contribution to GDP to an average of 10% for over two decades which is far below the global standard. It is on this backdrop that this study examines the moderating effect of ownership concentration on the relationship between financial leverage and tax burden on financial sustainability of listed manufacturing firms in Nigeria. The study’s population consists of fifty-five (55) listed manufacturing firms from where fourty four (44) firms were selected using purposive sampling technique  for the period of thirteen (13) years (2012 to 2024). The research adopted the ex-post facto research design with longitudinal panel, and secondary data were collected from the firms’ annual accounts for the period under review. Using Eviews 12 econometric statistical package for the analysis, the results revealed that the moderating effect of ownership concentration on the relationship between debt-to-asset  ratio and return on equity of listed manufacturing firms in Nigeria is negative and statistically insignificant.  Also found was that the relationship between effective tax rate and return on equity of listed manufacturing firms in Nigeria is positive and statistically insignificant when it is moderated by ownership concentration.  The study concluded that debt-to-asset ratio and effective tax rate has insignificant relationship with financial sustainability when it is moderated by ownership concentration of Nigerian listed manufacturing firms. The study recommends that listed manufacturing firms in Nigeria should use more internal funds to back their activities since debts reduces financial sustainability and also ensure that they give priority to effective tax rate as tax planning strategy.

Suggested Citation

  • Aronokhale, Ikwegiode Isaiah & Jacob Ojobo Ame & Orbunde, Bemshima, 2025. "Moderating Effect of Ownership Concentration on the Relationship between Financial Leverage and Tax Burden on Financial Sustainability of Listed Manufacturing Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 9579-9594, September.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:9579-9594
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-9/9579-9594.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/moderating-effect-of-ownership-concentration-on-the-relationship-between-financial-leverage-and-tax-burden-on-financial-sustainability-of-listed-manufacturing-firms-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Serhiy Zabolotnyy & Mirosław Wasilewski, 2019. "The Concept of Financial Sustainability Measurement: A Case of Food Companies from Northern Europe," Sustainability, MDPI, vol. 11(18), pages 1-16, September.
    2. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    3. Ning Wu & Jingyi Zhao & Mohammed Musah & Zhiqiang Ma & Lijuan Zhang & Yutong Zhou & Yongzheng Su & Joseph Kwasi Agyemang & Juliana Anyei Asiamah & Siqi Cao & Linnan Yao & Kaodui Li, 2023. "Do Liquidity and Capital Structure Predict Firms’ Financial Sustainability? A Panel Data Analysis on Quoted Non-Financial Establishments in Ghana," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    4. Jensen, Michael C. & Meckling, William H., 2008. "Theory of the firm: managerial behavior, agency costs and ownership structure," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 48(2), April.
    5. Innocent Augustine NWAORGU & Kingsley S. OYEKEZIE & Mary-Fidelis Chidoziem ABIAHU, 2020. "Effect Of Corporate Tax On Sustainable Financial Performance Of Listed Firms In Nigeria," Journal of Taxation and Economic Development, Chartered Institute of Taxation of Nigeria, vol. 19(1), pages 50-63.
    6. Shaker Dahan AL-Duais & Ameen Qasem & Wan Nordin Wan-Hussin & Hasan Mohamad Bamahros & Murad Thomran & Abdulsalam Alquhaif, 2021. "CEO Characteristics, Family Ownership and Corporate Social Responsibility Reporting: The Case of Saudi Arabia," Sustainability, MDPI, vol. 13(21), pages 1-21, November.
    7. Japhet Osazefua Imhanzenobe & David McMillan, 2020. "Managers’ financial practices and financial sustainability of Nigerian manufacturing companies: Which ratios matter most?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1724241-172, January.
    8. Abdalmuttaleb M.A. Musleh Al-Sartawi & Zakeya Sanad, 2019. "Institutional ownership and corporate governance: evidence from Bahrain," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 9(1), pages 101-115.
    9. George Tackie & Samuel Kwaku Agyei & Isaac Bawuah & Vincent Adela & Ahmed Bossman, 2022. "Tax planning and financial performance of insurance companies in Ghana: the moderating role of corporate governance," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2144097-214, December.
    10. Michael Amoh Asiedu & David Kwabla Adegbedzi & Richard Oduro & Sulemana Iddrisu, 2020. "Working Capital Management Effect On Return On Equity- Evidence From Listed Manufacturing Firms On Ghana Stock Exchange (Gse)," International Journal of Finance and Accounting, IPRJB, vol. 5(1), pages 47-66.
    11. Obiajulu Chibuzo Okeke & Wisdom Okere & Chinnan Francis Dafyak & Mary-Fidelis Chidoziem Abiahu, 2022. "Inventory management and financial sustainability: insight from quoted manufacturing firms in Nigeria," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 14(1), pages 84-97.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdul Waheed & Qaisar Ali Malik, 2021. "Institutional Ownership Board Characteristics and Firm Performance: A Contingent Theoretical Approach," International Journal of Asian Business and Information Management (IJABIM), IGI Global Scientific Publishing, vol. 12(2), pages 1-15, April.
    2. Ameen Qasem & Shaker Dahan AL-Duais & Wan Nordin Wan-Hussin & Hasan Mohamad Bamahros & Abdulsalam Alquhaif & Murad Thomran, 2022. "Institutional Ownership Types and ESG Reporting: The Case of Saudi Listed Firms," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    3. Aronokhale, Ikwegiode Isaiah & Jacob Ojobo Ame, PhD & Orbunde Bemshima, PhD, 2026. "Moderating Effect of Ownership Concentration on Liquidity and Dividend Payout on Financial Sustainability of Listed Manufacturing Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(5), pages 2063-2081, May.
    4. Belal Ali Ghaleb & Sumaia Ayesh Qaderi & Adel Ali Al‐Qadasi, 2024. "Independent female directors and integrated reporting quality: The moderating role of family ownership," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3429-3443, July.
    5. Sumaia Ayesh Qaderi & Belal Ali Abdulraheem Ghaleb & Abdulwahid Ahmed Hashed & Sitraselvi Chandren & Zaimah Abdullah, 2022. "Board Characteristics and Integrated Reporting Strategy: Does Sustainability Committee Matter?," Sustainability, MDPI, vol. 14(10), pages 1-24, May.
    6. Sang Cheol Lee & Mooweon Rhee & Jongchul Yoon, 2018. "Foreign Monitoring and Audit Quality: Evidence from Korea," Sustainability, MDPI, vol. 10(9), pages 1-22, September.
    7. Shaikh, Ibrahim A. & O'Brien, Jonathan Paul & Peters, Lois, 2018. "Inside directors and the underinvestment of financial slack towards R&D-intensity in high-technology firms," Journal of Business Research, Elsevier, vol. 82(C), pages 192-201.
    8. Tarek Roshdy Gebba & Mohamed Gamal Aboelmaged, 2016. "Corporate Governance of UAE Financial Institutions: A Comparative Study between Conventional and Islamic Banks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(5), pages 1-7.
    9. Asmund Rygh & Gabriel R. G. Benito, 2018. "Capital Structure of Foreign Direct Investments: A Transaction Cost Analysis," Management International Review, Springer, vol. 58(3), pages 389-411, June.
    10. Ilya Ivaninskiy & Irina Ivashkovskaya & Joseph A. McCahery, 2023. "Does digitalization mitigate or intensify the principal-agent conflict in a firm?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(3), pages 695-725, September.
    11. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    12. Adi Masli & Matthew G. Sherwood & Rajendra P. Srivastava, 2018. "Attributes and Structure of an Effective Board of Directors: A Theoretical Investigation," Abacus, Accounting Foundation, University of Sydney, vol. 54(4), pages 485-523, December.
    13. Dendi Ramdani & Arjen Witteloostuijn, 2012. "The Shareholder–Manager Relationship and Its Impact on the Likelihood of Firm Bribery," Journal of Business Ethics, Springer, vol. 108(4), pages 495-507, July.
    14. Etienne Redor & Magnus Blomkvist, 2021. "Do all inside and affiliated directors hold the same value for shareholders?," Economics Bulletin, AccessEcon, vol. 41(3), pages 882-895.
    15. Sergio Destefanis & Vania Sena, 2007. "Patterns of corporate governance and technical efficiency in Italian manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 27-40.
    16. David Hillier & Patrick McColgan, 2008. "An analysis of majority owner‐managed companies in the UK," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 48(4), pages 603-623, December.
    17. Rania Missaoui & Aymen Ajina, 2026. "Firm dynamics in corrupt environments: the case of the BRICS countries," SN Business & Economics, Springer, vol. 6(2), pages 1-38, February.
    18. Al-Najjar, Basil & Salama, Aly, 2022. "Mind the gap: Are female directors and executives more sensitive to the environment in high-tech us firms?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    19. Mohamed Ali Khaldi, 2016. "Mesure opérationnelle de la valeur partenariale et sa répartition," Post-Print hal-01900615, HAL.
    20. Brogi, Marina & Lagasio, Valentina, 2022. "Better safe than sorry. Bank corporate governance, risk-taking, and performance," Finance Research Letters, Elsevier, vol. 44(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:issue-9:p:9579-9594. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.