Corporate Diversification, Internal Capital Markets, and Minority Shareholder Value in Nigerian Conglomerates

This dissertation investigates the relationship between corporate diversification strategies, internal capital market efficiency, and minority shareholder value creation in Nigerian conglomerates. While diversification strategy has been extensively studied in developed markets, its implications for minority shareholder welfare within the governance structures typical of Nigerian business groups remain theoretically underdeveloped. Agency theory, internal capital market theory, and corporate finance strategy literature provide the integrated framework. The research employs a rigorous quantitative design. A comprehensive dataset of fifteen Nigerian conglomerates covering ten years of financial disclosures, dividend histories, and capital allocation records was assembled. Diversification-related discount and premium measures were constructed using segment data. Internal capital market efficiency was operationalized through the investment-to-value sensitivity approach. Panel data models with firm and time fixed effects were estimated. Findings reveal that related diversification in Nigerian conglomerates creates internal capital market efficiencies that benefit minority shareholders, particularly when governance structures include independent board oversight of capital allocation decisions. Unrelated diversification, however, generates significant diversification discounts that disproportionately affect minority shareholders without block-holder relationships. The dissertation advances corporate strategy theory by integrating minority shareholder welfare as an outcome variable within the diversification-performance debate and providing Africa-specific empirical evidence. Keywords: corporate diversification, internal capital markets, minority shareholders, Nigerian conglomerates, agency theory.