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Vol. 5 No. 10 (2022): American Journal of Economics and Business Management

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Effect of Managerial Ownership and Tax Aggressiveness on Financial Performance of Domestic Systematically Important Banks in Nigeria

https://doi.org/10.31150/ajebm.v5i10.1569
Udochukwu Godfrey Ogbonna
Associate Professor, Department Of Management Sciences, Rhema University, Nigeria
Uniamikogbo Emmanuel
Senior Lecturer Department of Management Sciences, Rhema University, Nigeria
Ezeji Amblessed Mmesoma
Department Of Management Sciences, Rhema University, Nigeria

Corresponding Author(s) : Udochukwu Godfrey Ogbonna

Ogbonna@gmail.co

American Journal of Economics and Business Management, Vol. 5 No. 10 (2022): American Journal of Economics and Business Management

Abstract

This study examined the effect of managerial ownership and tax aggressiveness on financial performance of deposit money banks in Nigeria. The secondary source of data collection method was employed using the annual reports and accounts of the Six (6) D-SIBs for the period spanning 2012 to 2021. The variables of interest in this study were managerial ownership and tax aggressiveness (independent variables), proxied by number of shares owned by managers and effective tax rate respectively while leverage was used as a control variable for the robustness of the specified model in the study. Financial performance (dependent variable) was proxied by return on equity. Data harvested from the annual reports and accounts were analyzed using the descriptive statistics and econometric techniques. The panel data technique was employed in the econometric analysis with the aid of E-view 9.1 statistical software. The outcome of the study revealed that tax aggressiveness and leverage have significant influence on financial performance of the selected banks in Nigeria. However, while tax aggressiveness had a negative effect on the financial performance of D-SIBs in Nigeria, leverage had a positive influence on the financial performance of D-SIBs in Nigeria. Conversely, managerial ownership had an insignificant effect on the financial performance of selected D-SIBs in Nigeria. The study, therefore, recommends that banks may need to drive policy that focuses on expansion of assets to create more value for the banks. Additionally, banks may seek to increase other ownership structures that can directly enhance performance over time. Finally, Nigerian banks may need to expand its operational efficiency to ensure that returns on equity are steadily improved.

Keywords

Managerial ownership Tax aggressiveness Leaverage Tax avoidance effective tax rate
Ogbonna, U. G. ., Emmanuel, U. ., & Mmesoma, E. A. . (2022). Effect of Managerial Ownership and Tax Aggressiveness on Financial Performance of Domestic Systematically Important Banks in Nigeria. American Journal of Economics and Business Management, 5(10), 51–71. https://doi.org/10.31150/ajebm.v5i10.1569
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