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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XV, Issue II, February 2026
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Corporate Reorganization and Corporate Performance of Oil and Gas
Companies in Nigeria
Tosin AKINWUNMI, Festus Folajimi ADEGBIE and Olayemi OGUNBODE
Babcock University, School of Management Sciences, Department of Accounting, Ilishan-Remo, Ogun
State
DOI:
https://doi.org/10.51583/IJLTEMAS.2026.1502000008
Received Received: 11 February 2026; Accepted: 16 February 2026; Published: 25 February 2026
ABSTRACT
Good performance directly contributes to maximizing shareholder value, and serves as a primary driver
for attracting new investors. It further demonstrates financial health, effective management, and the potential
for future returns. Organizations cannot always operate in the same manner since they are dynamic systems.
They must change through several life cycles in order to function smoothly and effectively. One of the main
goals for organization across the globe is to improve corporate performance. In order to maximize financial
performance and manage financial difficulties, corporate restructuring has evolved into a crucial strategy for
businesses. Evidence from literature showed that Organizations encounter challenges which led to financial
distress of many and liquidation of many oil and gas companies. Research has shown that not many oil and gas
companies have integrated corporate reorganization into their systems for enhancement of their performance.
This study therefore examined the effect of corporate reorganization on financial performance of listed oil and
gas companies in Nigeria for the period between 2010 - 2024. Ex-post facto research design was used. The
population of the study was 14 listed oil and gas companies in Nigeria Using the purposeful sampling techniques,
the sample size was 11 listed oil and gas companies The study found that assets restructuring has no significant
effect on financial performance as indicated by the coefficient 0.0084 and p-value 0.157 at 5% level of significant
while corporate financial restructuring and organizational restructuring have positive and significant effect on
financial performance with coefficient (1.3760; 0.1132) and p-value (0.009; 0.003) at 5% level of significant
respectively. The study concluded that corporate reorganization enhanced the corporate performance of oil and
gas companies. It recommended that Nigerian oil and gas management should create new market strategies,
practices, and resources that will boost competitiveness, adapt to market changes, and facilitate the development
of unique products and services that will satisfy shifting consumer demand for enhancement and growth of
corporate performance.
Key Words: Assets restructuring, Corporate restructuring, Financial restructuring, Neoclassical theories, and
Return on equity
INTRODUCTION
In today's business environment, companies of all sizes will be a part of the global business community,
influencing and being influenced by global pressures, events, and social change (Abiodun et al., 2024). This is
due to the dynamic, turbulent, discontinuous, and fiercely competitive nature of the business environment, which
necessitates careful planning. Organizations must swiftly develop operating strategies that improve their
competences from outdated ones in order to either adapt to new ones or be weakened by environmental changes
due to the rapid changes in the global economy (Atiyah, 2020). In order to maintain their position in the market,
organizations must adapt swiftly to new issues that arise in their environment (Bowman & Singh, 2018).
Organizations cannot always operate in the same manner since they are dynamic systems. They must change
through several life cycles in order to function smoothly and effectively. One of the main goals of an organization
globally is to improve corporate performance (Bakare et al., 2023). In order to maximize financial performance
and manage financial difficulties, corporate restructuring has evolved into a crucial strategy for businesses. In
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order to support revised policies and programs, it is a corporate strategy that intentionally engages and seeks to
impact policies, programs, goods, processes, and people (Azzouzi, 2022). A reorganization entails making
changes to an organization's systems, personnel, and operations. Additionally, it can entail shifting ownership or
rearranging departments (Wairimu & Omwenga 2022).
As the main source of government revenue, foreign exchange earnings, and industrial energy supplies, the oil
and gas industry plays a crucial role in Nigeria's economy (Mordor Intelligence, 2025; ICLG, 2025). The sector's
sustainability and competitiveness, as the foundation of the country's industrial growth and economic stability,
depend not only on its resource endowment but also on businesses' capacity to sustain a strong strategic market
position in the face of evolving global energy trends, environmental regulations, and technological disruptions
(Deloitte, 2025; Tonye & Boubai, 2025). In this case, a company's strategic market position demonstrates how
well it can handle competition, broaden its product line, and retain customers in an energy market that is growing
more diverse and less carbon-intensive (Ogbaini, 2025). Nigerian oil and gas companies must be able to adapt
to new laws, shifting market conditions, and innovative business practices in order to maintain this level of
performance.
Restructuring, which is usually linked to changes in the firm's ownership and financial structure, is a purposeful,
significant, and uncommon change in the organization and operation of corporate entities experiencing financial
and operational difficulties (Odi & Oji, 2024). A company's competitive position and market status are frequently
enhanced through restructuring, which includes mergers, acquisitions, divestitures, and debt restructuring (Dixit
et al., 2024). Changes to the funding mix, financial structure, dividend, capitalization, or retention policies may
follow. It may also manifest as organizational or technological shifts. All organizations, however, are
reorganized to optimize value and profit for stakeholders.
Nigeria's government is reshaping its oil and gas sector primarily through the Petroleum Industry Act (PIA)
2021, creating new regulators (NUPRC, NMDPRA) and a commercial NNPC Ltd., alongside recent Executive
Orders introducing fiscal incentives for deepwater/gas, cost efficiency, and local content, aiming for better
governance, increased investment, and gas monetization, though implementation challenges remain (Trade.gov,
2024). This reform is to reshape and comprehensively overhaul to modernize governance, improve transparency,
attract investment, and better manage revenues.
In order to support revised policies and programs, corporate restructuring is a company strategy that intentionally
engages and seeks to impact policies, programs, goods, processes, and people (Okoye et al., 2024). It is a
purposeful, significant, and uncommon change in the structure and functioning of companies experiencing
financial and operational difficulties, and it is usually linked to modifications in the company's ownership and
financial structure (Coates, 2014). When done properly, corporate reorganization should serve as a motivator for
improving a company's performance. It is a deliberate restructuring of a troubled organization to bring it back to
prosperity.
Reorganizations are helpful in this regard because the severity of some organizations' failures would require
significant improvements rather than merely small adjustments (Ndege & Ogollah, 2020).
Increasing revenue and improving efficiency are the primary motivations for reorganizing an organization;
however, restructuring may result in job losses, and even those who stay frequently fail to provide the anticipated
value, ultimately failing to improve the overall performance of the organization (Girod & Karim, 2017).
Corporate restructuring can remove infrastructure and financial barriers, which is helpful in addressing
organizational performance issues, even if organizational performance entails setting goals and working hard to
achieve them.
Managers and other stakeholders have taken notice of an organization's performance because it shows the health
and well-being of the organization. It measures the predetermined indicators of success and serves as the
foundation for the creation of plans, evaluation of accomplishments, and compensation (Muazu, 2024). Even
while corporate restructuring and performance have historically interacted, the implementation of a suitable plan
determines whether this relationship succeeds or fails. As a result, corporate restructuring is constantly sought
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for as a means of enhancing performance, particularly for dormant organizations. By promoting synergy,
corporate restructuring is a tactic that can assist companies in addressing subpar performance.
It has been noted that while a substantial portion of restructuring initiatives have been carried out, many of them
have not produced the expected outcomes. There are several reasons for this, but they haven't yet been explained
in a way that will help managers behave appropriately during the design and implementation phases (Makedon
et al., 2025). Furthermore, because of the high failure rate, the outcomes of successful restructuring initiatives
don't seem to fully justify the resources spent. Even though the oil and gas industry is a significant contributor
to GDP, foreign exchange earnings, and economic growth, it continues to face challenges from more volatile oil
prices, ambiguous laws, and the global trend toward renewable energy sources. Nigerian oil and gas businesses'
long-term survival in both domestic and foreign markets is threatened by all of these factors (Tonye & Boubai,
2025).
Restructuring a business is one way to address these issues, particularly with regard to automation, data analytics,
and digital transformation (Hanson et al., 2023; Trade.gov, 2024). By making their operations more adaptable,
customer-focused, and innovative, these restructuring components may help oil and gas businesses strengthen
their strategic market position. There are still unanswered questions regarding corporate restructuring and its
impact on the corporate performance of listed oil and gas companies in Nigeria, despite evidence that it has a
substantial impact on corporate performance (Kanyagia, 2020; Nweze et al., 2022; Nyambura & Maina, 2021).
In line with this, the following specific research hypotheses become pertinent and were tested:
i. Assets restructuring has no significant effect on financial performance of listed oil and gas companies in
Nigeria.
ii. Corporate financial restructuring does not have significant effect on financial performance of listed oil
and gas companies in Nigeria.
iii. Organizational Restructuring has no significant effect on listed oil and gas companies in Nigeria.
The majority of research in the area of restructuring for performance enhancement is predicated on the different
aspects of both variables, offering a constrained perspective on the topic. In order to see corporate restructuring
as a crucial part of corporate governance, a comprehensive approach is needed. For this reason, this review
combined many of the aspects of restructuring that were previously examined separately in order to determine
how restructuring can affect organizational performance. Additionally, financial performance has been the
primary metric used to assess performance.
LITERATURE REVIEW
Conceptual Review
Corporate Restructuring
Corporate restructuring which is usually used interchangeably with reorganization entails change the
organization's structure, business plan, and management group in order to solve problems, improve productivity,
raise shareholder value, and boost employee output-all of which improve organizational performance. Corporate
restructuring is concerned with organizing the business activities of the corporation as a whole to accomplish
specific predetermined objectives. Its scope includes cost reduction, increased efficiency, and improved
profitability. Therefore, a corporation must restructure in order to thrive in a competitive climate (Girod &
Karim, 2017). In order to identify areas of competency, improvement, and potential dangers, organizational
restructuring entails completing an assessment and using the results to guide strategic solutions.
Florio et al., (2018) describe corporate restructuring as the process of changing a company's organizational
structure. Corporate restructuring can entail drastically transforming a company by eliminating or combining
sections. It means reorganizing the company to boost productivity and profitability. To put it another way, it is
an all-encompassing procedure that enables a corporation to streamline its operations, improve its position for
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accomplishing corporate goals, create synergies, and maintain its competitiveness and success (Makedon et al.,
2025; Udeoji & Udeoji, 2024).
Corporate restructuring is a business approach that involves substantially changing a company's financial
structure, management team, or business model in order to solve problems and boost shareholder value (Okoye
et al., 2024). Although restructuring is typically intended to minimize the impact on employees, if possible, it
may require significant layoffs or bankruptcy (Dixit et al., 2024). Restructuring could entail selling the business
or merging with another business (Abiodun et al., 2024). Restructuring is a business approach used by companies
to secure their long-term existence. If creditors or shareholders believe that the company's current business
strategies are inadequate to protect their assets, they may compel a restructuring (Atiya, 2020).
Corporate Assets Restructuring
According to Lawrence et al., (2020), asset restructuring involves changing an asset's configuration by selling
off undesirable assets or asset types and substituting them with desired assets. It might entail buying new assets
and selling ones that aren't needed or desired. It could involve rearranging the asset mix of a portfolio by
purchasing desired asset kinds or securities while concurrently selling off undesirable asset types (cash, debt, or
stocks) or particular securities within that class (Hanson et al., 2023). When deciding when and how to alter the
assets in the portfolio, Maria, Angel, and Javier (2015) point out that fundamental, technical, and/or
macroeconomic analysis are crucial.
Financial Restructuring
The goal of financial restructuring is to keep the business from going out of business. Third parties typically
agree to satisfy creditors' claims under specific terms and conditions (Udeoji & Udeoji 2024).
Financial restructuring can also be accomplished by reaching a deal with all of the firm's creditors, whereby
creditors will be paid on conditions that differ slightly from those that the company originally accepted when
credit and loans were granted (Lucky & Akani, 2019). This type of financial restructuring minimizes losses to
creditors while allowing the business to continue operating.
Organizational Restructuring
Changes in human resources policies lead to organizational reorganization (Lucky & Akani, 2019). The
organization's present HR policies might need to be modified to reflect the evolving situation.
Change management must be made possible by the human resources division. According to Azzouzi (2022),
rationalizing the current wage structure is necessary to preserve internal and external equity among employees
and encourage them to increase productivity. Organizational reform may be necessary if certain indications are
present (Ogbaini, 2025).
Corporate Performance
Corporate financial performance is an overview of the company's financial status report over a period of time to
figure out how successful and profitable a company is in producing revenue (Okoye et al., 2024; Hanson et al.,
2023).
Corporate financial performance measures a company's financial health and success over time, analyzing
profitability, efficiency, and value creation using financial statements (income statement, statement of financial
position, cash flow) and key ratios to assess management's effectiveness for internal use, investors, and lenders.
Strong performance indicates good management, operational efficiency, and potential for future growth, while
weak performance signals risk, affecting investment decisions and sustainability.
THEORETICAL REVIEW AND FRAMEWORK
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Signaling Theory
The signaling theory was propounded by Michael Spence in 1973 (Connelly et al., 2011). Signaling theory stands
on the agency theory (Okolie & Izedonmi, 2014). This explains how managers may impart to the market
additional information about their company and their behavior. Signaling theory suggests that companies with
good performance use financial information disclosure through the help of effective structuring of the company
to send signals to the market. A high-quality audit sends a signal to the market that the financial statements are
credible. The signal of transparency and credibility sends assurance about the quality of a firm’s financial
disclosure in statements to the stakeholders and this positively enhance the performance of the companies.
Neoclassical Theories
Neoclassical theories was propounded by Alfred Marshall in 1904. Neoclassical theories assume individuals are
rational, self-interested actors (consumers maximize utility, firms maximize profit) making choices with perfect
information to achieve goals, leading to self-regulating markets that reach equilibrium (Dixit et al., 2024). Key
assumptions include rational preferences, independent decision-making, perfect information, profit
maximization, and market self-correction towards equilibrium. The theory was used by Dixit et al., (2024);
Azzouzi, (2022); and Hanson et al., (2023).
Neoclassical theories include the synergy factors, which presuppose that managers will only engage in corporate
restructuring if the returns are favorable for both the target and acquiring shareholders, resulting in a synergy
with positively correlated gains for both groups of shareholders (Odi & Oji, 2024). If the two combined
businesses generate a higher return than the two separate businesses due to factors like increased market power
and efficiency gains for the merged or acquired businesses, there is a synergy factor.
Operating synergies in terms of economies of scope and economies of scale, such as the capacity to provide a
broad range of products, are among the most commonly mentioned synergies with regard to corporate
restructuring objectives. Financial synergies are another type of synergy between businesses that have more
capital but fewer opportunities for expansion and another that has more potential for growth but less capital and
together can achieve higher profitability. One of the internal elements included by neoclassical theories is agency
cost. This is the expense made by the business when an agent is hired to make choices that will benefit the
company.
Stakeholders Theory
The stakeholder theory views the firm as a nexus of relationships. Freeman (1984), cited in Schilling (2000)
defines a stakeholder as “any group or individual who can influence or is influenced by the achievement of the
organization's objectives. In the words of Clarke (2004), stakeholder theory defines the firm as multilateral
agreements between the enterprise and its multiple stakeholders.
Unlike the agency theory which reduces the stakeholders in a firm to only shareholders and managers,
stakeholder theory views the firm as comprising more than two stakeholders (e.g. employees).
This theory was propounded by R. Edward Freeman in 1984 and assume that Companies should consider the
interests of all parties affected by their actions, including employees, customers, suppliers, communities, and
investors.
The relationship between the company and its internal stakeholders (such as employees, managers, and owners)
is framed by formal and informal rules developed through the history of the relationship. While management
receives finance from shareholders, they depend upon employees to accomplish the productive purpose of the
company.
Empirical Review
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Macaulay and Okoro (2025) investigated how corporate restructuring affected Nigerian oil and gas companies'
market share positions. Management-level respondents with operational, strategic, and managerial knowledge
were given a standardized five-point Likert scale questionnaire as part of the study's cross-sectional survey
design. The results showed a strong, positive, and statistically significant correlation between marketing
restructuring and strategic market position as well as between technological restructuring and strategic market
position. The study's findings show that in Nigeria's dynamic oil and gas industry, technology and marketing
restructuring are crucial drivers of competitive advantage, market relevance, and customer loyalty.
In their analysis of corporate restructuring in Nigeria, India, the United Kingdom, and the United States, Udeoji
and Udeoji (2024) identified and studied the legal frameworks, important authors, pertinent theories, and
research. Books and papers published in peer-reviewed academic journals were given special consideration.
Corporate restructuring was found to have the capacity to improve organizational performance, according to the
study's conclusion.
Based on panel analysis of data from five banks, Okoye et al., (2024) examined bank performance in the pre-
and post-reform eras to assess the value or effectiveness of the capital reform in improving bank performance.
The study's time frame was 1996–2016. The model's parameters were assessed using the generalized method of
moments. Total assets and deposit growth had a somewhat beneficial impact on bank performance prior to
reform, according to the random effects model's findings. However, the post-reform evaluation shows that
profitability is higher in smaller banks while it is noticeably lower in larger banks. Based on the aforementioned
data, the study claims that bank profit performance is significantly correlated with industry restructuring.
Vo et al., (2024) investigate the limited role of digital transformation on the impact of corporate restructuring
on firm performance in Vietnam. For 11 years, from 2011 to 2021, the study employed content analysis with an
emphasis on certain topics, such as digitalization, big data, cloud computing, blockchain, and information
technology. For the Vietnamese listed companies, the frequency index derived from these keywords serves as a
stand-in for the digital transformation. 118 Vietnamese listed companies with enough data for the generalized
method of moments (GMM) analysis make up the final sample. The findings show that business performance in
Vietnam is negatively impacted by corporate restructuring, including financial, portfolio, and operational
restructuring. Firm performance is also adversely affected by digital transformation.
METHODOLOGY
Research design: ex-post facto research design was used in the study. The ex-post facto research design was
used in this study, because the data was subjected to time and cross-sectional attributes. Ex-post facto research
design is applicable to the study in the sense that the nature of data to be used in the study involves events that
have already taken place (secondary source) (Asika, 2006). Traditional econometric methods which includes
fixed and random effects regressions, as well as OLS regression, instrumental variables and two-stage least
square estimation, as well as Vector Auto Regression models, were frequently used in the previous studies on
the subject matter (for instance see Echobu, Ekundayo & Abu, 2022; Uwuigbe et al., 2018; Adeyemi & Bakare,
2019; Owolabi, et al., 2016 Asogwa, 2017). This study, however, employed a GMM dynamic panel, a more
advanced estimating strategy. Traditional econometric techniques like OLS do not produce unbiased estimates
since the lagged dependent variable exists among the independent variables, which has increased the use of this
method.
Endogeneity, which biases the predicted coefficient of the lagged dependent variable when employing OLS
estimation, is also shown by the link between the lagged dependent variables and the error term. The Generalized
Moment Method estimator system is ideal to utilize in this case and could provide a solution given that the panel
data consist of time series and cross sections. This study makes the assumption that a company's financial
performance may be influenced by its financial performance from the previous year as well as by interactions
between explanatory variables and the financial performance (ROE) of sampled firms.
The GMM estimator is as follows:
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ROE
it
= α + β
1
ASRE
it
+ β
2
CFR
it
+ β
3
ORE
it
+ µ
i
Where ROE is return on equity, ASRE is assets restructuring, CFR is corporate financial restructuring, ORE is
organizational restructuring α captures intercept, β
1
– β
3
is the parameters of estimate µ
it
is ɛ
it
+λ
i
, while ɛ
it
is
stochastic error term, and λ
i
is cross-sectionals individual difference (Composite Error).
Population and Sampling Techniques: population of the study consists of 14 oil and gas companies on the stock
exchange for the period of 2010 - 2024. In arriving at the sample, in order to maintain the validity of the findings
for each company, the study, using purposeful sampling techniques arrived 11 oil and gas companies listed on
Nigerian stock exchange.
Data Analysis and Interpretations
Pairwise correlation analysis: Table 1 presents the results of pairwise correlation analysis to show the
relationship that exists among the variables of this study.
Table 1: Results of Pairwise Correlation Analysis
ROE
ASRE
CFR
ORE
ROE
1
ASRE
0.7149
1
(0.000)
CFR
-0.1852
-0.1354
1
(0.033)
(0.121)
ORE
0.1153
0.0699
-0.3024
1
(0.187)
(0.425)
(0.000)
Source: Authors’ Computations, (2025).
Return on equity has a statistically significant positive correlation coefficients with assets restructuring (0.7149
with p-value of 0.000) but a statistically significant negative correlation with corporate financial restructuring (-
0.1852 with p-value of 0.033). However, return on equity has no statistically significant correlation coefficients
with some variables such as organizational restructuring. This implies that return on equity has significant
positive relationship with assets restructuring but has significant negative relationship with corporate financial
restructuring. It also implies that return on equity moves in the same direction with the former variable but moves
in opposite direction with the latter variable. Consequently, higher levels of return on equity are associated with
higher levels assets restructuring, but higher level of return on equity are associated with lower levels of
corporate financial restructuring and vice versa.
Assets restructuring has no statistically significant correlation coefficients with all variables. Corporate financial
restructuring has a statistically significant negative correlation coefficients with organizational restructuring (-
0.3024 with p-value of 0.000). Overall, none of the correlation coefficients of the relationships among the
explanatory variables is as high as 0.8. Following the rule of thumb of detecting severe multicollinearity (see
Asteriou & Hall, 2016), this signifies that employing these variables together in a regression model would not
lead to the problem of severe multicollinearity.
Unit root test: Here are the findings from the unit root test. The purpose of the test was to confirm the time series
properties of the panel data used in this investigation, particularly its degree of stationarity. In order to prevent
erroneous regression findings in the work, the test is crucial to verify that the variables are stationary or otherwise
integrated.
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Table 2: Results of Fisher-type Augmented Dickey-Fuller Unit Root Test
Variable
p-value
Z-
statistic
p-
value
L*-
statistic
p-
value
Pm-
statistic
p-
value
Remark
ROE
0.000
-4.974
0.000
-8.686
0.000
14.04
0.000
Stationary
ASRE
0.008
-2.127
0.016
-2.309
0.012
2.844
0.002
Stationary
CFR
0.000
-2.752
0.000
-6.339
0.000
11.35
0.000
Stationary
ORE
0.000
-3.145
0.000
-4.765
0.000
7.264
0.000
Stationary
Source: Authors’ Computations, (2025).
Note: P-statistic is Inverse chi-squared statistic; Z-statistic is Inverse normal statistic; L*-statistic is Inverse
logit t statistic; Pm-statistic is Modified inverse chi-squared statistic.
The unit root test results presented in Table 2 are those from the Fisher-type augmented Dickey-Fuller procedure.
The test reveals four test statistics for the test which include the inverse chi-squared statistic (P), inverse normal
statistic (Z), inverse logit t statistic (L*) and modified inverse chi-squared statistic (Pm). The test results revealed
that the four test statistics support the fact that each ROE, ASRE, CFR, and ORE is stationary.
Looking at the results, all test statistics have high statistic value and low p-values which are enough to reject the
test null hypothesis of presence of unit root or in other words, non-stationarity. Since two of these variables
statistics support stationarity, then it is concluded that the variable is stationary. The results show that it is
stationary from the inverse normal and inverse logit t statistics, but not stationary from the inverse chi-squared
and modified inverse chi-squared statistics. Since two of these statistics support stationarity, then it is concluded
that the variable is stationary.
Table 3: Result of Variance Inflation Factor (VIF)
Variable
VIF
1/VIF
ASRE
3.5
0.232787
CFR
3.31
0.301964
ORE
3.3
0.302653
Mean VIF
11.56
Source: Authors’ Computations, (2025).
With each of the VIF values being lower than 10, the model of this study is free from multicollinearity problem.
The tolerance (1/VIF) values also suggest similar conclusion, as each of the values are well above zero.
The variance inflation factor results therefore revealed that all the independent variables of the model do not
exhibit very high correlation that can lead to multicollinearity problem. The result further buttresses the
conclusion reached from the pairwise correlation analysis.
Regression of Results and Discussion of Findings
The result of the corporate reorganization and its effect on financial performance of the focused sector is
presented here.
Table 4: Result of System GMM for Return on Equity
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Variable
Coefficient
Standard Error
Z
p-value
ROE(lag)
0.23177
0.152732
-1.52
0.129
ASRE
0.00824
0.005828
1.41
0.157
CFR
1.37597
1.698909
-0.81
0.009
ORE
0.11324
0.118172
-0.96
0.003
Constant
2.860752
2.473595
1.16
0.247
Sargan test
3.248
0.671
AR test (1)
-1.411
0.158
AR test (2)
-1.425
0.154
Wald X
2
10.92
0.000
R-square
89.3
Adjusted R-square
84.8
Source: Authors’ Computations, (2025).
The table above is not complete.
Research Model and Apriori Expectation
ROE
it
= α + β
1
ASRE
it
+ β
2
CFR
it
+ β
3
ORE
it
+ µ
i
INCO = 0.2318 + 0.0082A + 1.3760C + 0.1132O
When the Arellano-Bond test of autocorrelation (AR) is used to evaluate the model of this study in terms of
autocorrelation (also known as serial correlation), the null hypothesis that there is no autocorrelation is presented.
The fundamental premise of the test is that while first-order autocorrelation in the GMM result might be
acceptable, second-order autocorrelation seriously casts doubt on the validity of the result. The outcome
demonstrates that the p-value is much higher than 0.005 and the first-order autocorrelation statistic value is fairly
high (i.e., -1.411). This satisfies the test's criterion and suggests that there is no first-order autocorrelation in the
model, proving that the null hypothesis that there is no first-order autocorrelation could not be rejected.
Additionally, the outcome demonstrates that the p-value is much higher than 0.05 and the second-order
autocorrelation statistic value is fairly high (i.e., -1.425). This suggests that the second-order test, which satisfies
the test's condition, cannot reject the test null hypothesis.
As a result, neither first-order nor second-order autocorrelation issues exist in the model.
The Sargan test of over-identifying restriction was performed for this model in order to assess the validity of the
instruments used. This was done to confirm the validity of the limitations imposed on the used instruments to
prevent over-identification. This test's null hypothesis concerns the validity of over-identifying limitations. The
results imply that the test's null hypothesis could not be rejected for the model given the statistic value of the test
result, which is 3.248, and its p-value being greater than 0.01. This suggests that the model's over-identifying
constraint is appropriate.
Examining the significance of each of the model's explanatory variables, the findings indicate that the assets
restructuring has an insignificant effect, with coefficients of 0.00824 and p-values of 0.157, on the one hand,
corporate financial restructuring and organizational restructuring have positive and statistically significant effect
on financial performance of Nigeria oil and gas companies with the coefficients of 1.37597, and 0.11324 and p-
values 0.009, and 0.003 respectively. The findings are robust because the system GMM estimator produces
consistent estimates; this is confirmed by Arellano-Bond test of autocorrelation statistic.
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Overall, the result of the Wald X
2
of (10.92) with P-value of (0.0000). This shows that corporate reorganization
has significant effect on financial performance of listed oil and gas companies in Nigeria. This significance of
corporate financial restructuring, and organizational restructuring implies that effective restructuring will have
positive and significant effect on financial performance of oil and gas companies.
DISCUSSION OF FINDINGS
There is no question that sound and efficient corporate restructuring of oil and gas companies plays a significant
role in improving financial performance and justifying shareholder interest of listed oil and gas companies in
Nigeria, based on the results of all the regression estimates shown in Table 4. The financial performance of listed
oil and gas businesses can be impacted by corporate reorganization, as demonstrated by the GMM-based
regression models.
According to the first regression finding, assets restructuring has a favorable but negligible impact on the
financial performance of Nigerian listed oil and gas businesses as determined by the sampled companies' return
on equity. This outcome is consistent with research by Azzouzi (2022), Dixit et al. (2024), and Udeoji and Udeoji
(2024). The financial performance of listed oil and gas businesses in Nigeria is positively and significantly
impacted by organizational and corporate financial restructuring. The research conducted by Makedon et al.,
(2025), Hanson et al., (2023), Tonye and Boubai (2025), and Vo et al., (2024) supports these findings.
The results indicated that Nigerian oil and gas businesses should be better able to adapt to changes in the market,
which suggested that management should be more in line with the organization's objectives and that there may
be cost and overhead savings. The results show that a firm's decision to restructure is impacted by political/legal,
technological, economic, and sociocultural aspects; the firm's goals, technology advancements, and economic
reasons are given more weight. In an effort to improve performance, organizations have embraced the idea of
restructuring and are doing it more frequently. Performance was most affected by financial restructuring, which
was followed by organizational and portfolio restructuring.
CONCLUSION AND RECOMMENDATIONS
Using the GMM estimate approach, this study examines how corporate restructuring affected the financial
performance of Nigerian listed oil and gas businesses between 2010 and 2020. The study comes to the conclusion
that organizations should implement some degree of survival tactics regardless of their overall health and well-
being, let alone those that have evident existential issues.
Therefore, restructuring continues to be a viable recovery strategy for troubled businesses. Depending on the
underlying cause of the issue, the particular goal sought, and the prevailing environmental variables, the
restructuring strategic choices could include mergers and acquisitions, joint ventures, divestitures, corporate
takeovers, strategic alliances, corporate buyouts, and tender offers. The study thereby recommends that:
i. In order to improve the performance of the companies following corporate restructuring, the management
of the companies should implement tactical and strategic methods for managing the operating
environment.
ii. The management of the listed oil and gas companies in Nigeria should as a matter of fact and in order to
maximize benefits, customer loyalty, and market share over time in a competitive environment,
strategically change their technological infrastructure, processes, and capacities to make them more
inventive, efficient, and competitive.
iii. Nigerian oil and gas management should create new market strategies, practices, and resources that will
boost competitiveness, adapt to market changes, and facilitate the development of unique products and
services that will satisfy shifting consumer demands.
Contribution to knowledge and Future Research
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A unique distinctive characteristic of this study is the combination of corporate assets restructuring, financial
restructuring, and organizational restructuring regressed against return on equity of the sampled oil and gas
companies in Nigeria. This is rare in the contemporary studies on the effects of corporate restructuring on
financial performance of listed oil and gas companies in Nigeria and has provided insights that have added to
the body of knowledge in the field of study.
The study acknowledged the efforts of the previous studies that have investigated the study on the subject area
of study. However, majority of these studies focused on other sector and failed to extend the scope up to 2024
while none of these previous studies conducted in Nigeria used generalized method of moments (GMM) and
mostly used ordinary least square method in analysing their data.
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