THE IMPACT OF INSTITUTIONAL OWNERSHIP STRUCTURE ON EARNINGS QUALITY OF LISTED FOOD/BEVERAGES AND TOBACCO FIRMS IN NIGERIA
Keywords:
Earnings Quality, institutional Ownership, Firm SizeAbstract
This study focused on the impact of institutional ownership on earnings quality of listed Food/Beverages and Tobacco firms in Nigeria over the period 2005-2013. The study utilized documentary data obtained from the annual reports and accounts of the companies for the period of the investigation. The data was first analyzed by means of descriptive statistics and subsequently, correlation analysis was carried out using Pearson correlation technique. A panel data regression technique was employed to estimate the models since the data has both time series and cross sectional attributes. The results reveals that one of the variables used, that is institutional ownership show a significant result while firm size use as control variable fail to show a significant result. The study concludes that the shares institutional investors have in the firm is an important monitoring and control device, which help to prevent abuses and other irregularities by the managers; it has improved the earnings quality of the firms; prevent fraud; maximize shareholders’ wealth and enhanced the value of the firms. The size of the firms which is the control variable has not shown any significant positive effect on earnings quality of the listed food/beverages and tobacco firms in Nigeria this could be proved by the insignificant level and correlation with the independent variable. The study therefore, recommend among others: That to ensure that institutional ownership continues to impact positively on earnings quality of listed food/beverages and tobacco firms in Nigeria. The SEC should make it mandatory for institutional investors to have stake in most of the food/beverage and Tobacco firms operating in the country in order to reduce the opportunistic behaviour of the firm’s managers. Regulatory authority such as SEC should monitor the activities of institutional shareholders who are operating in the country.
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