Does Ownership Structure Lead to Optimal Financial Structure?

Objective – This study interrogates the relation between ownership structure and financial structure by using the non financial services sector of Nigeria.

Design – This study used the panel data extracted from the annual reports and accounts of the non financial services sector of Nigeria for the time period of 2012 to 2021.

Findings – The key finding shows that ownership structure has a significant positive relationship on financial structure. This result mitigates the agency conflicts among managers and shareholders, because the majority of the shareholders would like to have a higher level of debt over equity financing.

Policy Implications – The findings of this study also can be helpful to the regulators, policymakers, investors and financial institutions in designing ownership structures and financing decisions for corporations.

Originality – This is the first study that examined the relationship between ownership structure and financial structure in the context of the non financial services sector of Nigeria.