Value Relevance of Corporate Sustainability Reporting of Listed Industrial Goods Firms in Nigeria

Abstract

The study examines the effect of corporate sustainability on value relevance in Nigeria by employing samples from listed industrial goods firms in Nigeria from 2012 to 2021. Environmental sustainability (ENVI), social sustainability (SOCI) and governance sustainability (GOVI) are the proxies for the independent variable of corporate sustainability. On the other hand, share price (SHPR) is the proxy for the dependent variable. Furthermore, the study control’s the model goodness of fits by employing the variable of market capitalization (MCAP). The population of this study is made up of all listed industrial goods companies on the Nigerian Exchange Group during a 10-year period i.e. between 2012 and 2021. As of 31st December 2021, there were seventeen (17) industrial goods firms listed on the floor of the Nigerian Exchange Group. However, the final sample size consist of ten (10) listed industrial goods firms in Nigeria. This study employed analytical software of Stata version 14 and Microsoft excel for the analysis. The secondary data collected was analyzed using descriptive statistics, correlation, and regression analysis. In this study, the researchers concludes that only the variable of social and governance sustainability reporting appears to significantly affect the value relevance of listed industrial goods firms in Nigeria. However, the researcher documents and insignificant negative effect of environmental sustainability on the value relevance of listed industrial goods firms in Nigeria. The study recommends that valuable financial, material, and human resources should be channeled on policies that relates to improving governance sustainability if the desire is to gain improved firm value.