AGENCY RESIDUAL LOSS AND FINANCIAL PERFORMANCE OF LISTED COMPANIES IN NIGERIA

Abstract

This study investigated the effect of agency residual loss on financial performance as well as a comparative examination of listed financial and non-financial companies in Nigeria, using the ex-post facto research design.  The study used a sample of 10 financial and 10 non-financial companies from a population of 157companies listed on the NGX from 2011 to 2020 using the filtering and random methods. Data were sourced from annual reports of twenty (20) sampled companies. Panel regression estimate was used with the aid of multiple regression techniques for data analysis and findings show that agency residual loss exerts a significant positive effect on financial performance of listed financial companies in Nigeria. The study further established that a significant difference exists in the effect of agency residual loss on financial performance of listed financial and non-financial companies in Nigeria. The study, therefore, recommended that companies in the financial sector should prioritize agency cost in the form of residual loss as it significantly influence financial performance.