Ownership structures, board characteristics and firm value: The moderating effect of product market competition

Abstract

The study assesses the moderating impact of product market competition on the relationship between corporate governance and corporate value. The sample comprises of 89 listed manufacturing firms for 5 years period (2018-2022) as used in the study. Multiple regression model was utilised with panel corrected standard error (PCSE) for the analyses. Corporate governance proxies by foreign ownership, ownership concentration, managerial ownership, women on board, board size, board independence serves as the independent variable are tested on economic value added (EVA) as a measure of firm value which represent the dependent variable. The result shows that ownership concentration, board size, and board independence
have a positive influence on firm value (EVA). However, managerial ownership is found to have a negative impact on the value of corporate firms whereas foreign ownership and women on board are insignificantly related to the value of Nigerian manufacturing firms. The moderating influence of product market competition strengthens the relationships of foreign ownership, managerial ownership, women on board and board independence on firm value positively. Nonetheless, the empirical result revealed the negative and significant interacting impact of product market competition on ownership concentration and negative insignificant relationship on board size with firm value respectively. The study recommends the necessity for the continues liberalization and diversification of the Nigerian economy in order to expand the competitiveness of the manufacturing firms so that derivable benefit from PMC is created for owners and other relevant stakeholders.