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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
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    References listed on IDEAS

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