Moderating Effect of Ownership Concentration on Liquidity and Dividend Payout on Financial Sustainability of Listed Manufacturing Firms in Nigeria

Abstract

The financial sustainability of listed manufacturing firms in Nigeria is crucial for economic growth, industrial development, and job creation in the country. However, these firms face challenges such as fluctuating exchange rates, rising production costs, and limited access to finance, which threaten their long-term viability. This study therefore examines the moderating effect of ownership concentration on liquidity and dividend payout on financial sustainability of listed manufacturing firms in Nigeria. The study’s population consists of fifty-five (55) listed manufacturing firms from which fourty four (44) was selected for the period of thirteen (13) years (2012 to 2024) using purposive sampling technique. The study adopted the ex-post facto research design with longitudinal panel, and secondary data were collected from the firms’ annual accounts for the period under review. Ownership concentration, liquidity, dividend payout, firm age, and financial sustainability were proxied by substantial shareholding (5% and above), current ratio, dividend payout ratio, years since incorporation, and return on equity respectively. Using Eviews 12 version for the analysis, the results of the study revealed that current ratio had negative and insignificant effect on return on equity of listed manufacturing firms in Nigeria, however, when moderated by ownership concentration, it had positive but insignificant effect on return on equity. Dividend payout ratio on the other hand, had positive but insignificant effect on return on equity, likewise when moderated by ownership concentration of listed manufacturing firms in Nigeria. The study, therefore, concludes that when liquidity and dividend payout are moderated by ownership concentration, it has a positive but insignificant effect on financial sustainability of listed manufacturing firms in Nigeria. Based on the findings, the study recommends that listed manufacturing firms in Nigeria should strengthen ownership engagement for better liquidity oversight and adopts independent, performance-based dividend polices to enhance financial sustainability.