OWNERSHIP STRUCTURE AND CASH HOLDING OF LISTED SERVICE FIRMS IN NIGERIA: THE MEDIATING EFFECT OF FINANCIAL LEVERAGE

This study examines the mediating effect financial leverage on the relationship between ownership structure and cash holdings of listed service in Nigeria. The study employed correlational research design using data from the Nigeria Exchange Group (NGX) over the period of fourteen years (2010- 2023). Data was extracted from the annual report and accounts of the seventeen out of twenty-two listed services firms for the period through the application of filter from a purposive sampling technique. The data was subjected to descriptive statistics, correlation and Structural Equation Adjusted Modeling (SEM) were used as techniques for data analysis while bootstrapping result was used to determine the level of significance of the indirect effects and the hypotheses formulated were tested. The findings demonstrate that ownership structure does not influence financial leverage, this implies that firms with greater managerial, Institutional and foreign investors are likely to hold more cash for day-to-day activities while financial leverage affects cash holdings of the sampled firms. Moreover, ownership structure directly influences cash holdings without the influence of financial leverage decision as a mediator. Based on this finding, the study recommended that management of listed services firms should continue to strengthen governance frameworks to ensure that both foreign and institutional stakeholders prioritize effective cash management practices. In the same vein, policymakers encourage local ownership structure due to the influence of this type of ownership on a firm's capital structure and its joint importance effect with firm investments. In the same vein, management should develop robust cash management strategies to balance liquidity needs with debt obligations. This can include optimizing cash flow forecasts and managing working capital efficiently. Furthermore, management should implement long-term financial planning that considers ownership structure's impact on cash holdings, ensuring that firms are prepared for future financial needs without relying heavily on leverage.