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 listeddeposit money banks in Nigeria. The study adopted correlational research design using panel datacollected from annual reports and accounts of 14 deposit money banks in Nigeria that form thewhole population of the study for the period of 10 years (2010-2019). Descriptive statistics was usedto analyze data in order to provide summary statistics for the variables. Pearson’s correlationtechnique was employed in order to analyze and ascertain the extent of the relationship between thedependent and independent variables. The fixed effect regression results revealed that institutionalinvestors have a positive and significant relationship with investors’ confidence. The result furthershows that insider and block ownership has a negative and statistically significant relationship withinvestors’ confidence. And on the contrary foreign ownership has no significant relationship hencedid 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 Nigeriashould 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 havemore confidence in the firms. Insider ownership should be monitored and reduced by the Securitiesand Exchange Commission; this will prevent insiders from owning a substantial amount of equitywhich give them the freedom to act in their best interests at the detriment of other shareholders. Thestudy further recommends managers of listed deposit money banks should ensure that their firmsdesist from higher levels of block holder ownerships in order to reduce ownership concentration.