Ownership Structure and Real Earnings Management: Evidence from Listed Consumer Goods Companies in Nigeria

Abstract

This study investigates the effect of ownership structure on earnings management among listed consumer goods companies in Nigeria, with firm size included as a control variable. Data were obtained from annual reports of 16 firms listed on the Nigerian Stock Exchange between 2004 and 2022. Using descriptive statistics, Pearson correlation, and panel corrected standard errors (PCSEs) regression, ownership structure was proxied by managerial, institutional, foreign, concentrated, and diversified ownership. The findings show that diversified ownership significantly constrains earnings management, indicating that dispersed shareholding enhances monitoring and limits opportunistic financial reporting. In contrast, managerial ownership, institutional ownership, foreign ownership, and concentrated ownership had no significant effect on earnings management practices. Firm size was incorporated as a control variable to account for scale-related variations in financial reporting behavior, thereby strengthening the robustness of the results. Overall, the study underscores the importance of diversified ownership in promoting financial reporting quality and reducing the likelihood of earnings manipulation in Nigeria’s consumer goods companies.

Keywords: , , Diversified ownership, Firm size,