Corporate Governance and Market Value of Listed Manufacturing Firms in Nigeria

Abstract

This paper examined the level of corporate governance compliance and its effect on the market value of listed manufacturing firms in Nigeria. The study adopted descriptive survey research design and used secondary data. The population of the study comprised of 78 listed manufacturing firms on the Nigeria Stock Exchange at the end of 2018. Using purposive sampling techniques, relevant data were obtained from 56 firms whose stocks were traded consistently on the stock market. Corporate governance practices and all other relevant economic data were obtained from the firm’s annual reports, the publication of the Nigeria Stock Exchange (NSE) as well as the website of the firms. The data were analyzed using tables, percentages and random effect estimation. The empirical and significant relationship between corporate governance index (t = 10.680 p < 0.001, t = 13.682 p < 0.001, and t = 11.206 p < 0.001) and firms’ value are found to be positive and highly significant in the three estimations. The study concluded that corporate governance is a value driver. The extended findings from the study also indicated that corporate governance mechanisms put in place by firms can ensure financial transparency and serve as catalyst towards ensuring proper utilization of the capital contributed to the firm by its inventors.