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

Jocelyn U. Upaa (Correspondent Author)
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

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 ssustainability 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.
Key words: Sustainability Reporting, Environmental Reporting, Social Reporting, Economic
Reporting, Market Performance, Tobin’s Quotient, Nigeria.

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