EFFECT OF CORPORATE VOLUNTARY DISCLOSURES ON THE VALUE OF QUOTED INDUSTRIAL GOODS COMPANIES IN NIGERIA

Abstract

This study examines the effect of voluntary disclosures on firm value of quoted industrial goods companies in Nigeria. Specifically, the study examines the combined effects of voluntary environmental, social and risk disclosures on firm value. The study adopts an ex-post facto research design. This study's population comprises all the thirteen industrial goods companies quoted on the Nigerian Stock Exchange as of 2022. Since the population is small, all the companies were used for the purpose of data collection. The data were collected from the sampled companies’ annual reports for ten years. This study measures firm value using Tobins Q. Furthermore, environmental and social disclosures were measured using estimates from GRI (2018) indicators as an index of the percentage of the number of items disclosed to the total number of items expected to be disclosed while risk disclosure was measured using dichotomous 1 and 0 for disclosure and non-disclosure respectively. The study employs multiple regression techniques for analysis with STATA version 13. The result of the regression showed that voluntary environmental and risk disclosures have a positive effect on firm value while voluntary social disclosure has a negative effect on the value of quoted industrial goods companies in Nigeria. The study holds that voluntary disclosures are additional corporate disclosures in satisfying the information needs of stakeholders thus improving the overall value of industrial goods companies in Nigeria. Thus, the study recommends that the financial reporting council of Nigeria makes it mandatory for industrial goods companies to report their environmental and risk information in their annual financial statements.