Effect of Corporate Social Responsibility Disclosure on Firm Value Among Listed Industrial Goods Companies in Nigeria

Abstract

The study examined the effect of corporate social responsibility (CSR) disclosures on firm value of listed industrial goods companies in Nigeria. The study adopts an ex-post facto research design, using panel data covering a ten-year period (2015–2024). A fixed effect regression model was employed after relevant diagnostic tests confirmed its suitability. The findings reveal that environmental, social, and community involvement disclosures exert a positive and statistically significant effect on firm value. Specifically, environmental disclosure improves firm value by promoting transparency on issues such as waste management, emission control, and sustainable resource use, which enhances investors’ confidence. Social disclosure positively influences firm value by demonstrating corporate commitment to employee welfare, diversity, and consumer safety, thereby strengthening market reputation. Community involvement disclosure also significantly contributes to firm value, particularly in Nigeria where corporate-community relations are critical to maintaining operational stability and a social license to operate. Furthermore, firm size and profitability were found to have significant positive effects on firm value, suggesting that larger and more profitable firms are better positioned to leverage CSR disclosures for enhanced valuation. The study concluded that the findings demonstrate that CSR disclosures are not only compliance tools but also strategic mechanisms that enhance market valuation. It recommends that Industrial goods companies should increase transparency in disclosing environmental initiatives such as waste management, renewable energy adoption, and pollution control.