Moderating Effect of Board Diversity on Economic Sustainability Reporting and Firm Value of Listed Manufacturing Firms in Nigeria

Abstract

This study examined the effect of economic sustainability reporting on firm value of listed manufacturing firms in Nigeria and assessed the moderating role of board diversity in this relationship. A quantitative ex-post facto research design was adopted, utilizing panel data from annual reports and sustainability disclosures of firms listed on the Nigerian Exchange Group over the period 2010–2024. The population of the study is all the 54 quoted firms on the Nigerian Exchange group as of year 2024 while the sample of the study is 43 firms that had the complete 15-year data set required for the study. Secondary data were complemented with this information. Data analysis was conducted by employing descriptive statistics, panel unit root and cointegration tests, and panel regression techniques with heteroskedasticity-consistent standard errors to ensure robustness. The findings reveal that economic sustainability reporting has a positive and statistically significant effect on firm value, indicating that enhanced disclosure improves transparency, strengthens investor confidence, and increases market valuation. Board diversity was also found to exert a positive and significant effect on firm value, reflecting improved governance quality and strategic decision-making. More importantly, the interaction between economic sustainability reporting and board diversity was positive and significant, confirming that board diversity strengthens the value relevance of sustainability reporting. The study concludes that effective governance mechanisms enhance the benefits of sustainability disclosures and recommends that firms should strengthen reporting practices and board diversity to improve their value and long-term competitiveness.