Effect of Ownership Diversity on Financial Stability of Listed Consumer Goods Firms in Nigeria

Shareholders are always regarded as corporate owners, while directors are agents or 
representatives of shareholders who are supposed to allocate business resources in a way to 
increase their wealth. In Nigeria, several issues related to the governance and management of 
companies have been identified. These problems range from errors and mistakes to outright fraud. 
The origins of these problems range from concentrated ownership, weak incentives, and poor 
protection of minority shareholders to weak information standards. This study examines the effect 
of ownership structure diversity on financial stability of listed consumer goods firms in Nigeria. 
The study adopts an ex-post facto research design using panel data from ten years, 2014-2023, to 
examine the effect of independent variables, institutional ownership, ownership concentration and 
foreign ownership, on the dependent variable, financial stability. The population of the study 
consist of all consumer goods firms listed on the Nigerian Exchange Limited as of 31st December 
2023. In view of this, sixteenth (16) consumer goods firms listed on Nigerian Exchange Limited 
were selected to represent the sample size for this study using a purposive sampling technique 
based on the criterion that consumer goods firms must be listed and disclose all the data needed 
for the study in the annual reports. Secondary data was used, and data was sourced from the 
audited annual reports and accounts of the sample consumer goods firms. The multiple 
regression technique was used with the aid of EViews 10 to analyze the data. The findings 
show that institutional ownership has a negative and insignificant effect on the financial 
stability of listed consumer goods firms in Nigeria. Ownership concentration and foreign 
ownership have negative and significant effects on the financial stability of listed consumer 
goods firms in Nigeria. The study recommends that there is a need to extensively increase 
institutional shareholding, concentrated shareholding and foreign shareholding of the listed 
consumer goods firms in Nigeria as not only a way to increase the share of the firms but as a way 
of encouraging them to increase their efficiency.