INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue III, March 2025
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Effect of Capital and Ownership Structure on Financial
Performance of Listed Information and Communication
Technology Firms in Nigeria
1
Ogunleye, Joshua Kehinde Ph.D, *
2
Afolabi, Chukwudi Segun Ph.D,
3
Akinleye, Bilikis Olayemi Ph.D
4
Tajudeen
Adewale Odetayo
5
Igbaroola, Oluwafemi Ayodimeji
1
Department, Business Edication, Osun State collge of Education, Ila-orangun, Nigeria
2
Department of Accounting, University of Ilesa, Ilesa, Nigeria
3
Department of Aounting, Adeleke University Ede,Nigeria
4,5
Department of Accounting, University of Ilesa, Ilesa, Nigeria
*Corresponding Author
DOI : https://doi.org/10.51583/IJLTEMAS.2025.140300017
Received: 16 March 2025; Accepted: 19 March 2025; Published: 03 April 2025
Abstract: The study examines how different types of capital ownership affect the financial performance of publicly traded IT
companies. The study also examined the relationships and effects among the selected variables. The study looked at the firm's
debt-to-equity ratio, total debt-to-asset ratio, long-term debt-to-asset ratio, and short-term debt ratio. The firm's financial
performance was the dependent variable. It also looked at managerial, institutional, and foreign ownership. We considered an ex-
post facto research design appropriate for the study, which focused on the ten years' annual financial reports of the listed
information and communication technology firms (2014-2023). The data analysis employed the multiple regression technique,
panel data analysis with fixed effects, random effects, and pooled ordinary least square models. It was found that the capital and
ownership structure of listed ICT companies in Nigeria have a big impact on their financial performance (FV=18.20, P<0.05;
FV=7.9571, P<0.05; FV=11.7298, P<0.05; FV=12.852, P<0.05). The study concluded that capital and ownership structures are
potent factors affecting the financial performance of listed ICT firms in Nigeria. The study suggests that listed ICT companies
should let managers buy shares. This will encourage them to carefully handle debt to lower risks and use debt capital wisely in
projects that will improve the business's long-term value and financial performance.
Keywords: Capital structure, ownership structure, financial performance, Debt/Equity, Total debt, Long term debt, short term
debt.
I. Introduction
Information and Communication Technology (ICT) firms in Nigeria face challenges in determining the appropriate capital mix to
achieve desired corporate performance, particularly in debt financing and balancing debt and equity. Such situations can lead to
low performance and a decline in the firm's value and shareholder wealth. Shareholders and institutional investors place high
value on an organization's success, and managers must ensure that all corporate resources are properly utilized for comparable
returns.
The capital and ownership structure of ICT firms significantly influence their financial health and ability to expand and thrive.
The Nigerian ICT sector has grown significantly recently, playing a significant role in employment, innovation, and business
development. Fundraising for ICT firms is challenging due to the reliance on intellectual capital rather than tangible assets.
Combining loans and equity is the best option for financing a company's assets.
It's important to stress the impact of capital-ownership structure in the ICT sector because ICT companies are a big part of
economic growth and are part of the Nigerian Exchange group of companies that don't have a lot of room to grow quickly
because of the needs of the Nigerian people and the growing market potential. There are few studies investigating the effect of
capital-ownership structure on the performance and value of listed ICT firms in Nigeria, despite their contributions to the
Nigerian economy. The goal of this study is to fill in a gap in the research by looking at how ownership structure, total debt to
assets, long-term debt to equity, and short-term debt to assets affect financial performance as measured by return on assets and
return on equity.
II. Literature Review
Capital Structure
A company's capital structure, as defined by Berk and DeMarzo (2017), includes debt, equity, and other securities. Its goal is to
keep capital costs low for customers and ensure the company's long-term survival. The choice of capital is crucial as it directly
impacts a firm's risk and return. The best mix of debt and equity capital is considered the "capital structure of a corporation." The
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue III, March 2025
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proportion of debt and equity in the entire capital structure of a company is essential for financial management. The optimal
capital structure involves increasing shareholder wealth and value while minimizing capital cost. However, identifying the
optimal mix of debt and equity can be challenging due to uncertainty and risks.
Recent debates on the effectiveness and efficiency of a company's asset management and capital structure indicators have led to
various discussions. The ratio of a company's debt to equity provides insight into its long-term viability, revealing how much
money comes from creditors and investors. The long-term debt-to-capital ratio measures how much an organization owes over the
long run and demonstrates a company's ability to repay its debts and its risk tolerance.
Long term debt ratio = Long term debt
Total assets
Akaji, Nwadialor, and Agubata (2021) define the short-term debt ratio as the ratio between a company's short-term capital and
short-term debt. Short-term debt is any obligation due within a year, often reflected in the current liabilities section of a financial
statement. Short-term bank loans are a common component of a company's liabilities and debt; they are used to fund current
assets and long-term liabilities for long-term assets.
Short term debt ratio = Short term debt
Total assets
Overall debt ratio refers to the total amount of debt owed by a business, including any equity investments. The total debt is the
sum of current obligations and long-term debt, while total capital is the whole capitalization of the company. We can
mathematically calculate the total debt ratio as follows:
Total debt ratio = Total liability
Total assets
Ownership Structure
The concept of ownership structure, defined by Jensen and Meckling (1976) and widely used in literature, is the focus of this
study. There are two types of investors in an organization: inside investors and outside investors. Inside investors and shareholder
committees consist of individuals, groups, and organizations with various objectives, time horizons, and financial resources. They
have a say in all major decisions, including who serves on the board of directors, how the company's internal financial records are
improved, and who is appointed as an auditor.
Good corporate governance is influenced by these organizational structures, which can be attributed to accountability,
transparency, the efficient use of scarce resources, and competitively and efficiently managed enterprises. A good ownership
structure reduces the risks of financial crises and money loss. Control of a firm is also known as ownership structure, which is
defined as the distribution of equity to votes and capital.
Managerial ownership refers to the situation where managers own the business they run, acting as managers and shareholders of
the company. This type of ownership increases the equity of the organization and provides managers with a strong economic
incentive to align ownership and control, ensuring that managers act in the best interest of shareholders. Management shares are
the proportion of shares held by managers of an entity.
The percentage of a company's total issued shares owned by institutions is known as institutional ownership. Institutional
investors, such as banks, insurance firms, and pension funds, have explicit fiduciary responsibilities. Institutional shareholders are
more engaged than ordinary shareholders in the company, focusing on optimizing returns. They have a higher level of expertise in
the capital markets and the company as a whole, and they are better able to take action, making it possible for them to monitor
managers in a more efficient and cost-effective manner. In this study, institutional ownership was defined as the percentage of the
company's stock owned by various institutions as investors.
Foreign ownership refers to the presence of foreign investors in a company, which can lead to higher financial performance due to
their expertise, resources, and ability to control and monitor management. This study defines foreign ownership as the percentage
of shares owned by foreigners to the total number of shares issued. The extent to which a company has met its financial goals and
how well it utilizes its assets to generate revenues is known as financial performance. Organization theory and strategic
management form its foundation, with two types of measurement: monetary and operational. The success of a company relies
heavily on its ability to perform well, and there is a current trend toward evaluating a company's performance based on the
creation of value, which is linked to the goal of sustainable development.
Previous research has used Tobin's Q and accounting rate of return to measure a company's performance, but they are
interchangeable. Accounting profitability and market value performance were used as measures in this study, in line with the
findings of Asen, Nwude, Idamoyibo, Ufodiama, and Udo (2021). Return on Assets (ROA) is the overall effectiveness of
management in generating profits with its available assets. The higher the firm's ROA, the better. The profitability measure ROA
is considered a subject of disagreement among scholars. The simplest way to determine ROA is to take net income reported for a
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,
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period and divide that by total assets. This study chose financial performance measures by adjusting interest and tax to evaluate
the performance of management objectively (Ogunleye, 2023).
Return on Assets (ROA) = Net Income
Total Assets
ROE: Return on Equity
ROE serves as a gauge of a corporation's profitability relative to its stockholders' equity. ROE is far more than a measure of
profitability but shows how efficiently the company is in managing the capital invested by the shareholders. ROE provides a
simple metric for evaluating investment returns. It also provides insight into how the company's management is using equity
financing to grow the business. Return on equity (ROE) is a measure of financial performance calculated by dividing net income
by shareholders’ equity. ROE is important to shareholders because it shows their capital return after paying other capital
suppliers. It is consistent with the works of Nguyen, Pham, Dao, Nguyen, and Tran (2020), Okewale, Mustapha, and Aina (2020).
The reason for using ROE is that it helps investors to evaluate how their investments are generating income.
It was expressed as: Net Income
BookValue of Equity
Tobin’s Q
This study uses Tobin's Q as a proxy for firm value, which is the ratio of a firm's market value to its asset replacement cost. We
widely use it as a forward-looking market-based indicator for a firm's financial performance, as it determines how effectively a
firm exploits limited resources. The agency theory, rooted in Berle & Means' work and modernized by Jensen and Meckling, is
used to measure the approximation for Tobin's Q.
Agency theory posits that a division of ownership and control can lead to agency issues when managers' motives are not to
maximize company performance. In a company context, the principal is the shareholder or other stakeholder, while the agent is
the internal party where stakeholders invest or delegate authority. When ownership and control are separate, the agency theory
can predict and explain behavior and decisions. Shares held by various individuals and institutions give shareholders control or
power to force the company to run optimally in operational, investment, and other corporate activities. If the company's
performance meets shareholders' expectations, they consider that the company's share price deserves a high value.
The conceptual view of ownership structure and capital structure uses ROA, ROE, and Tobin's Q as a measure of financial
performance.
Figure 1: Researcher’s concept 2025 the relationship between dependent and independent variables as conceived in the study.
Empirical Studies
The relationship between capital structure, firm ownership structure, and firm performance has been extensively studied in
various countries. In Jordan, Al-Thuneibat (2018) found positive relationships among these variables, while Wu (2019) found that
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,
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debt financing and ownership concentration positively influenced firms' performance. We conducted this study in Nigeria,
specifically in the ICT sector.
Mishelle (2021) found that leverage has a significant negative impact on firm value in East Africa, suggesting that higher debt
would result in a decrease in firm value. Additionally, managerial ownership had an inverse and significant impact on the
relationship between leverage and firm value. This finding is consistent with previous research by Rosink (2020), Nguyen and
Nguyen (2020), Braik and Messar (2018), and Christoph (2018), who all concluded positive relationships between capital
structure and firm performance.
Andhika (2021) looked at how institutional ownership, debt, and firm size affect the value of a company in Japan using multiple
linear regressions and moderated regression analysis. Profitability was used as a moderation variable. The results revealed that
firm value is not influenced by institutional ownership but is significantly affected by leverage. Ichiro and Satoshi (2022) found
that managerial, domestic and foreign ownership exert a positive impact on performance, suggesting that management discipline
by investors is less sufficient in emerging markets. The study specifically focused on ICT companies in Nigeria. Rosyeni and
Muthia (2019) found a significant relationship between institutional ownership and performance in Indonesia, but not significant
when measured by ROA. They also found that liquidity had a positive effect on ROA, economic growth had a positive effect on
firm performance, and size had no effect on firm performance. Huthaifa, Ashraf, and Mohammad (2019) found a positive
relationship between capital structure and institutional ownership to improve financial performance in Jordanian real estate
companies through ROA, ROE, and EPS. Tri and Abdul (2020) looked at how institutional ownership and capital structure affect
the value of a company, using financial distress as a moderating variable. The study looked at non-bank companies registered in
Indonesia from 2016 to 2018. In conclusion, there is a significant relationship between capital structure and firm value, which is
moderated by financial distress. If capital structure rises and financial distress increases, firm value will increase. The study
focuses on the impact of leverage, ownership structure, and microeconomic factors on firm performance in Nigerian ICT
companies. The results show a negative but statistically significant relationship between leverage and firm performance with both
ROA and ROE. Additionally, managerial, institutional, and family-owned ownership have a negative but statistically significant
relationship with performance in listed companies in the Pakistan stock exchange.
Olusola, Mengze, Chimezie, and Chinedu (2022) examined the impact of capital structure on the firm performance of large
companies in the Hong Kong stock exchange from 2014 to 2018. The study concluded that cultural, political, and institutional
differences should be considered when assessing the impact of capital structure on a firm's performance. The current study
measures performance using ROA, ROE, and Tobin's Q and supports both the pecking order theory and trade-off theory. Musa
(2019) conducted a study on the effect of corporate financing, corporate governance, ownership structure, and microeconomic
factors on the financial performance of listed deposit money banks in Nigeria. The results revealed that debt financing, board
diversity, ownership concentration, institutional ownership, GDP, exchange rate, inflation rate, firm age, size, liquidity, and bank
management efficiency all have significant negative effects on financial performance. Ownership contraction tends to minimize
the effect of managerial ownership, as argued in some literature. Chaudhary, Iqbal, and Hussain (2023) looked at how financial
stress, debt, and poor business performance were related in some Pakistani companies from 2005 to 2012. The study concluded
that leverage plays a significant role and requires extreme care in its adjustment.
Egolum, Onyinyechukwu, and Eze (2021) investigated the effect of ownership structure on the value of listed oil and gas firms in
Nigeria. The study found that managerial and CEO ownership structure had an insignificant positive effect on firm value, while
government ownership had an insignificant negative effect. Suleiman, Barnabas, and Abdulnumeen (2024) investigated the effect
of ownership structure on the performance of listed financial firms in Nigeria between 2014 and 2023. The study found that
increasing managerial ownership can align the interests of managers with shareholders, leading to enhanced firm performance.
Fasua et al. (2020) examined the mediating effect of dividend payment policy on the relationship between managerial ownership
and firm value in listed manufacturing firms in Nigeria. The study found that managerial ownership and the policy on dividend
payouts both played a part in the value of the company. The policy on dividend payouts indirectly played a role by increasing
managerial ownership.
III. Methodology
This study uses an ex-post facto research design, focusing on listed information and communication technology firms on the
Nigerian Exchange Group floor as of December 2023. We selected seven ICT firms using census sampling and annual secondary
data from annual reports and financial statements. Multiple regression, panel data analysis, fixed effects, random effects, pooled
ordinary least square models, and Hausman's chi-square statistics were used to look at the data.
ROA, ROE & Tobin’s Q = f{DER, TDTA, LTDA, STDA, MO, IO, FO}…….. 3.1
Transforming equation 3.1 into mathematical models gives
Pooled Regression Model Specification
ROA
it
= 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 2
ROE
it
= 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 3
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Tobin’s Q = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 4
Fixed Effect Model Specification
ROA = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 5
ROE = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 6
Tobin’s Q = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 7
Random Effect Model Specification
ROA = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 8
ROE = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 9
Tobin’s Q = 𝛽
0
+ 𝛽
1
DER
it
+ 𝛽
2
TDTA
it
+ 𝛽
3
LTDA
it
+ 𝛽
4
STDA
it
+ 𝛽
5
MO
it
+ 𝛽
6
IO
it
+ 𝛽
7
FO
it
+ 𝜀
it
………………….. 10
Where:
F = function of
ROA = Return on asset
ROE = Return on equity
Tobin’s Q = Tobin’s Q
DER = Debt to equity ratio
TDTA = Total debt to assets
LDTA = Long term debt to assets
SDTA = Short term debt to assets
MO = Managerial ownership
IO = Institutional ownership
FO = Foreign ownership
𝛽
1
- 𝛽
7
= 𝜌
i = Cross section (Sample firms)
t = Time period (2014-2023)
𝜀 = 𝜀rror term
IV. Results and Discussion
The study examines the impact of capital-ownership structures on the performance of Nigerian listed ICT firms. A panel least
square model is proposed, which is only effective and consistent when the residual shows no serial correlation or
homoscedasticity. The Wald test for groupwise heteroscedasticity and Wooldridge test for autocorrelation in panel data were used
to confirm the model's robustness. The results show that the models are free from serial correlation and heteroscedasticity.
The result shows that the null hypothesis of the two tests was rejected.
Table 4.1 Diagnostic Test
Test
Test Statistics
P-value
ROA Model
Wald test for groupwise heteroskedasticity
0.7574
0.3841
Wooldridge test for autocorrelation in panel data
0.3318
0.5645
ROE Model
Wald test for group wise
0.4031
0.5254
Heteroskedasticity
Wooldridge test for autocorrelation in panel data
0.2562
0.6127
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TOBQ Model
Wald test for groupwise heteroskedasticity
0.1400
0.7082
Wooldridge test for autocorrelation in panel data
0.0441
0.8335
The study analyzed the impact of capital-ownership structure on the Return on Assets (ROA) of Nigerian listed ICT firms using
post-diagnostic tests. The model was found to be robust and passed the necessary tests. The study also assessed the
appropriateness of three estimate models, including the Hausman Test, Lagrange Multiplier Test, and Redundant Fixed Effect
Test. The results showed that the fixed effect model was better than the pooled OLS and random effect model. The overall
coefficient of determination showed that 67.8% of the variation in ROA was explained by independent variables. The model also
found that DE had a negative relationship with firm ROA, TDTA had a positive relationship, LTDA had a positive relationship,
and STDA had a positive relationship. The model also found that MO, IO, and FO of the sampled ICT firms contributed to their
ROA.
Table 4.2 Regression Estimate of the combined effect of capital-ownership structures on ROA of listed ICT firms in Nigeria.
Dependent Variable: ROA
Pooled OLS Model
Fixed Effect Model
Random Effect Model
t-value
Coeff.
t-value
t-value
DER
-2.067466
-2.797370
-0.880300
-2.067466
TDTA
2.457437
0.024334
2.115362
2.457437
LTDA
-0.275218
0.738228
2.163249
-0.275218
STDA
0.773806
0.991668
0.834804
2.773806
MO
0.223310
2.247896
2.407518
0.223310
IO
0.531093
0.453282
2.097134
-0.531093
FO
2.880785
0.695853
2.696311
-0.880785
SIZE
2.254063
0.438532
2.487560
2.254063
C
-1.152431
-2.285772
1.355887
-1.152431
R-squared
0.364804
0.678387
0.564804
Adjusted R-squared
0.217416
0.571183
0.487416
F-statistic
9.118167
18.26154
17.18167
Prob(F-statistic)
0.000000
0.000000
0.000000
Hausman Test
57.23761, p=0.0000
Lagrange Multiplier Test
19.7723
P=(0.0000)
Redundant Fixed Effect Test
20.6171(P=0.0000)
*Significant at 5% level
This study examines the impact of capital-ownership structures on the Return on Equity (ROE) of Nigerian listed ICT firms. The
model specification tests include the Langrage Multiplier Test, Hausman test, and Lagrange Multiplier test. The results show that
random effects outperform pooled OLS in capturing the link between dependent and independent variables. The fixed effect
model is found to be the most appropriate, with DER having the most significant effect on the firms' ROE. Other significant
factors include TDTA, LTDA, STDA, MO, IO, FO, and SIZE. The study also found that SIZE contributed to the firms' ROE,
with a coefficient of 0.331710 (t=3.907048, p<0.05). The model's independent variables accounted for 72.6% of the ROE
variance, with an f-statistics of 7.9571 and a p-value less than 0.05, indicating statistical significance.
Table 4.3 Regression Estimate of the combined effect of capital-ownership structure on ROE of listed ICT firms in Nigeria.
Dependent Variable: ROE
Pooled OLS Model
Fixed Effect Model
Random Effect Model
Coeff.
t-value
t-value
t-value
DER
5.117175
3.034144
3.072656
3.086399
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TDTA
-0.016770
-0.827142
2.233426
-0.841387
LTDA
-0.147951
-0.498738
0.094211
-0.507328
STDA
-0.565170
-2.024694
2.465906
-2.059564
MO
1.247275
2.070444
0.093240
2.106102
IO
0.149790
0.894560
2.499960
0.909966
FO
-0.025770
-0.151678
2.092663
-0.154290
SIZE
-0.145340
-4.093560
3.907048
-4.164061
C
1.020359
5.705589
5.209514
5.803853
R-squared
0.439552
0.726205
0.43552
Adjusted R-squared
0.340649
0.634940
0.340649
F-statistic
4.444284
7.957116
4.444284
Prob(F-statistic)
0.000250
0.000000
0.000250
Hausman Test
39.7482, p=0.0000
Lagrange Multiplier Test
28.2911
P=(0.0000)
Redundant Fixed Effect
Test
16.2731(p=0.0000)
The analysis of capital-ownership structures on the Total Operating Cost (TOBQ) of Nigerian listed ICT firms revealed that
random effect is better than pooled OLS. Fixed effect is also better than pooled OLS. The study found that DER had a negative
relationship with TOBQ, while TDA reduced it. LTDA had a positive relationship with firm value, while MO enhanced it. IO had
a positive effect on firm value, while FO had a positive effect. SIZE had a negative relationship with firm value. The variables
were statistically significant at a 5% level, with 67.19% of variations accounted for by explanatory variables. The overall
significance of the variables indicates that the model is statistically significant at a 5% level.
Table 4.4 Regression Estimate of the combined effect of capital-ownership structures on Tobin’s Q of listed ICT firms in Nigeria
Dependent Variable: TOBQ
Random Effect Model
Fixed Effect Model
Pooled OLS
Coeff.
t-value
Coeff.
t-value
Coeff.
t-value
DER
-0.8102
-2.0426
-0.9430
-2.3675
-0.7357
-0.7453
TDA
0.0035
0.5190
-0.0058
-2.1918
0.0017
0.6036
LTDA
0.1814
2.0420
0.1882
2.3760
0.1020
0.7939
STDA
0.1597
0.7738
0.0249
0.1155
0.0866
0.7313
MO
1.0252
3.2851
1.5483
5.2171
0.7719
2.5329
IO
0.2147
2.1308
0.2980
2.8408
0.1770
1.8873
FO
-0.2049
-2.4860
0.1246
0.8670
-0.1259
-1.3179
SIZE
-0.0825
-3.3135
-0.1308
-5.4516
-0.0446
-1.8983
C
1.1326
6.8060
1.2957
6.3577
0.7221
4.1046
R-squared
0.6543
0.6719
0.2543
Adjusted R-squared
0.5227
0.5456
0.1227
F-statistic
19.3324
12.8521
2.9332
Prob(F- statistic)
0.0000
0.0000
0.0018
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Hausman Test
40.3526, p=0.0000
Langrage Multiplier Test
36.4872, p=(0.0000)
Redundant Fixed Effect
Test
23.74126 (p=0.0000)
V. Discussion of Findings
The study investigates the impact of capital and ownership structures on the financial performance and value of listed ICT firms
in Nigeria from 2014 to 2023. The results show that both capital and ownership structures have a significant positive effect on
financial performance and firm value. This aligns with previous empirical studies, such as those by Holderness (2016), Al-
Thuneibat (2018), Shafiq, Aamir, Shrafat, Alif and Sami (2020), and Mishelle (2021). The study suggests that listed ICT firms
with a good optimal capital structure and supportive ownership structure achieve improved financial performance and firm value
growth. However, further research is needed to definitively conclude the association between capital and ownership structure and
financial performance/value of ICT firms in this specific context. The study recommends encouraging managers to buy and own
shares to judiciously utilize debt capital in projects that improve financial performance and value. This research contributes to
knowledge in the specific sector of ICT, creating an updated database of capital-ownership structure of listed ICT firms in
Nigeria.
Recommendations and Conclusion
For ten (10) years, from 2014 to 2023, the research looked at how ownership and capital structures affected the valuation and
financial performance of listed ICT companies in Nigeria. Based on the aforementioned results, the research comes to the
conclusion that ownership and capital structures significantly affect the value and financial performance of Nigerian listed ICT
companies. This is consistent with well-known theories including agency theory, Pecking Order theory, and other empirical
research. Consequently, the study's capital and ownership structure variables have a significant impact on the worth and
performance of Nigerian listed ICT companies. Owner-managers may also make better use of borrowed capital to boost the firm's
value and financial performance. The report suggests that management of information and communication technology businesses
listed in Nigeria need to be encouraged to purchase and hold shares. This will assist them in making prudent use of borrowed cash
for initiatives that will increase the company's value and profitability. By using data from 2014 to 2023, this subject will improve
our knowledge of the ICT industry and lead to the development of a more current and comprehensive database on the capital-
ownership structure of Nigerian listed ICT companies.
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