Mohammed Abdulkadir, Samuel Nduati Kariuki, Peter Wang’ombe Kariuki
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引用次数: 0
Abstract
Purpose
The paper investigates the effect of ownership structure on the financial distress of firms listed in sub-Saharan Africa.
Design/methodology/approach
Using secondary data from 106 non-financial firms listed in 9 selected SSA countries from 2016 to 2021, the research using paired t-tests and conditional logistic regression model analysed a sample of 174 distressed observations matched with 174 non-distressed observations.
Findings
T-tests determined significant differences between distressed and non-distressed groups concerning institutional, foreign, and local ownership. Conditional logistic results established that institutional, foreign, and state ownership significantly reduce distress. However, managerial ownership does not influence financial distress while a significant positive relationship is observed between local ownership and financial distress.
Originality/value
This is the first study to investigate the influence of ownership structure, including local ownership, on financial distress in SSA, employing a unique methodology of matched design and conditional logistic regression analysis. Furthermore, the paper presents cross-country evidence from emerging frontier markets, highlighting the importance of governance frameworks in firms’ stability.
期刊介绍:
African Journal of Economic and Management Studies (AJEMS) advances both theoretical and empirical research, informs policies and practices, and improves understanding of how economic and business decisions shape the lives of Africans. AJEMS is a multidisciplinary journal and welcomes papers from all the major disciplines in economics, business and management studies.