Corporate Ownership Structure and Investors’ Confidence of Listed Deposit Money Banks in Nigeria

Abstract

This paper investigates the effect of corporate ownership structure on investors’ confidence of listed deposit money banks in Nigeria. The study adopted correlational research design using panel data collected from annual reports and accounts of 14 deposit money banks in Nigeria that form the whole population of the study for the period of 10 years (2010-2019). Descriptive statistics was used to analyze data in order to provide summary statistics for the variables. Pearson’s correlation technique was employed in order to analyze and ascertain the extent of the relationship between the dependent and independent variables. The fixed effect regression results revealed that institutional investors have a positive and significant relationship with investors’ confidence. The result further shows that insider and block ownership has a negative and statistically significant relationship with investors’ confidence. And on the contrary foreign ownership has no significant relationship hence did not play any role in influencing investors’ confidence of listed deposit money banks in Nigeria. Based on the findings, the study recommends managers of listed deposit money banks in Nigeria should give more room to institutional investors to own more shares so that the higher their interest, the more they will be willing to monitor the activities of the firms. This will enable investors to have more confidence in the firms. Insider ownership should be monitored and reduced by the Securities and Exchange Commission; this will prevent insiders from owning a substantial amount of equity which give them the freedom to act in their best interests at the detriment of other shareholders. The study further recommends managers of listed deposit money banks should ensure that their firms desist from higher levels of block holder ownerships in order to reduce ownership concentration.