Ownership Structure and the Performance of Oil and Gas Firms in Nigeria

Abstract

This study was motivated by the fact that the oil and gas sector has continued to be a key driver of the Nigerian economy contributing about 90% of her foreign exchange earnings. Firms in this sector are observed to be very vulnerable to agency crisis as they have a large pool of free cash flows that could easily be misapplied to the exclusive benefits of managers. This research work therefore studied the effects of ownership structure on the performance of oil and gas firms in Nigeria from 2008 to 2020 using panel regression technique. The results of the panel regression revealed that ownership structure captured by managerial shareholding, ownership concentration and institutional ownership had a positive and significant relationship with firm performance. In view of the findings, the study recommended that concentrated shareholding, managerial ownership and institutional ownership should be encouraged for enhanced performance of listed oil and gas firms in Nigeria.