SUSTAINABILITY REPORTING AND MARKET PERFORMANCE OF QUOTED NIGERIAN MANUFACTURING FIRMS

Abstract

Motivated by the growing global emphasis on corporate sustainability practices and the need to understand their value relevance within emerging capital markets, the study investigates the relationship between sustainability reporting and market performance of quoted Nigerian oil and gas firms over the period 2020 to 2024. Sustainability reporting is decomposed into environmental, economic, social, and governance dimensions, while market performance is employed as the dependent variable. Firm size and profitability are incorporated as control variables to account for firm-specific effects. The study adopts an ex-post facto research design and utilizes secondary panel data sourced from the audited annual financial reports of firms listed on the Nigerian Exchange Group. Data were analyzed using panel econometric techniques, including stationarity tests, pooled Ordinary Least Squares, fixed and random effects models, diagnostic tests, cointegration analysis, and an error correction model. The results of the Augmented Dickey–Fuller unit root test reveal that all variables are stationary at level, thereby eliminating the risk of spurious regression. The Hausman specification test indicates that the fixed effects model is the most appropriate estimation technique, highlighting the importance of firm-specific heterogeneity. Empirical findings show that environmental sustainability reporting, economic sustainability reporting, and governance sustainability reporting have positive and statistically significant effects on market performance, while social sustainability reporting exhibits a positive but statistically insignificant relationship. The cointegration results confirm the existence of a long-run equilibrium relationship among the variables, and the error correction model demonstrates a significant speed of adjustment toward equilibrium following short-run deviations. The study concludes that sustainability reporting, particularly environmental, economic, and governance disclosures, plays a critical role in enhancing firm value within the Nigerian oil and gas sector. It recommends stronger regulatory enforcement, improved disclosure quality, and increased stakeholder awareness to maximize the benefits of sustainability reporting. The study contributes to the literature by providing disaggregated evidence on the sustainability–performance nexus in an emerging market context and offers practical implications for policymakers, corporate managers, and investors.