Effect of Sustainability Reporting on Market Performance of Listed Manufacturing Companies in Nigeria

AFRAG022

Effect of Sustainability Reporting on Market Performance of Listed Manufacturing Companies in Nigeria

Jocelyn U. Upaa (Correspondent Author) Jossyupaa@gmail.com

+2348039585172

Department of Accounting, Benue State University, Makurdi, Nigeria.

Isaac M. Kwanum

Department of Accounting, Benue State University, Makurdi, Nigeria.

Edith O. Onyeanu

Department of Accountancy, University of Nigeria, Nsukka, Nigeria edith.onyeanu@unn.edu.ng

Abstract

This study examined the effect of sustainability reporting on market performance of listed manufacturing companies in Nigeria by applying ex-post facto research design where secondary data were extracted from the annual reports and accounts of 65 sampled manufacturing companies for five (5) years from 2015- 2019 through content analysis to obtain the independent variables namely: environmental reporting index (ENV), social reporting index (SOC) and economic reporting index (ECO). These were used to form two interacting variables namely environmental-social reporting index (ENVSOC) and social-economic reporting index (SOCECO) to further investigate bi- lateral relationships. These were  regressed

on     the     dependent     variable,  Tobin’s

Quotient (TQ). Mixed model panel regression analysis specified the suitability of random effects model which was used to analyse the data. The results revealed that environmental reporting has positive and significant effect on TQ; economic reporting has positive but insignificant effect while social reporting has negative and insignificant effect on TQ. For the interacting terms, ENVSOC has negative but significant effect on TQ while SOCECO has positive but insignificant effect on TQ. The study concluded that sustainability reporting has moderate effect on market performance of listed manufacturing companies in Nigeria. It was recommended that sustainability disclosures especially environmental and social aspects need to be included in the policy framework in Nigeria. This will signal to the Nigerian public that companies are not only after the profit and wealth maximization objective alone but are keen to engage in other acts that are environmentally and socially responsible. Also, government should create awareness about the need for sustainability reporting by including it in the curriculum of Nigerian tertiary institutions. This will enlighten the society and create more awareness on the necessity of carrying out sustainable practices that enhance the good health and well-being of not only the present generation but that of sustaining the environment for future unborn generations. Keywords: Sustainability Reporting, Environmental Reporting, Social Reporting, Economic Reporting, Market Performance, Tobin’s Quotient, Nigeria.

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