Corporate governance and equity value: empirical evidence from Nigerian firms

Abstract

Purpose

The purpose of this study is to examine the impact of selected corporate governance (CG) variables on the equity value multiple (EVM) of listed firms in Nigeria.

Design/methodology/approach

The research used data obtained from 100 firms listed on the Nigerian Stock Exchange (NSE) from 2014 to 2018. A generalized method of moment was used to estimate the relationship, whereas principal component analysis was used to generate composite values of EVMs.

Findings

Findings reveal a significant association between board size, board independence, board gender diversity, managerial shareholding, audit committee independence, disclosure of CG information and EVM at a 1% level of significance.

Research limitations/implications

This study was limited to firms that disclosed information on CG and EVMs.

Practical implications

These empirical findings lend support to agency theory, which suggests the use of various CG variables as a way of reducing principal-agent conflicts. It also lends support to resource dependency theory from a gender diversity perspective.

Originality/value

The study is a pioneering effort toward unlocking the relationship between some CG variables and the EVMs, focusing on firms listed on the NSE.

Citation

Shittu, I. and Che-Ahmad, A. (2024), "Corporate governance and equity value: empirical evidence from Nigerian firms", Corporate Governance, Vol. 24 No. 2, pp. 462-484. https://doi.org/10.1108/CG-12-2020-0579