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Foreign Ownership and Financial Performance of Listed Non- Financial Companies in Nigeria: Moderated by Environmental Sustainability Reporting

Solomon Kumai Ngu1 Samuel Eniola Agbi2 Lateef Olumide Mustapha3 Joshua Okpanachi, Marvis Irom Irom

Abstract

This study examined the effect of foreign ownership on financial performance of listed non- financial companies in Nigeria, with environmental sustainability reporting as a moderating variable. A total of 61 listed non-financial companies were chosen using a stratified random sampling method from a population of 107. Secondary data was collected from the annual reports and financial statements of the selected companies covering the period from 2011 to 2023, and the data was analyzed using multiple regression analysis with STATA 18 statistical software. The results revealed that foreign ownership has a negative and statistically significant effect on financial performance, as measured by return on assets . However, environmental sustainability reporting was found to have a significant positive effect on financial performance. Furthermore, the moderating effect of environmental sustainability reporting on the relationship between foreign ownership and financial performance was found to be significant, suggesting that companies with higher environmental disclosures tend to mitigate the negative effect of foreign ownership on financial performance. The findings indicate that while foreign ownership may result in decrease in financial performance, robust environmental sustainability reporting can enhance financial outcomes. Therefore, the study recommends that listed non-financial companies in Nigeria should prioritize environmental sustainability reporting to improve financial performance. Regulatory authorities, such as the Financial Reporting Council of Nigeria should consider making environmental sustainability reporting mandatory to enhance transparency and accountability. Additionally, companies should attract more foreign investors, as their presence, combined with strong environmental disclosures, can lead to better financial performance.

Keywords

Foreign OwnershipFinancial PerformanceNon-Financial Companies Environmental Sustainability Reporting

References

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