CORPORATE GOVERNANCE AND FIRM VALUATION IN THE NIGERIAN STOCK MARKET
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The slow pace of firm valuation and the rising stride of fraud has been attributed in part to Corporate Governance. This research work aims at educating the companies and their management who are capable of reversing the current pace to a much better and improved pace. This study was aimed at ascertaining firm value response to internal and external corporate governance, using indications from the Nigerian stock market, which covers a period from 2012 to 2019. To determine the response of firm value to the internal and external corporate governance processes, two indexes were determined using the principal component analysis (PCA), and data was sourced from the annual reports of the sampled firms listed on the Nigerian stock market. The variables used were firm value proxied by Tobin’s Q, internal corporate governance index composed of board independence, board meeting, the board size, and board education, and external corporate governance index represented by corporate disclosures, audit type, timeliness of reporting, and corporate governance code. The data was analyzed through a series of tests including the descriptive statistics, PCA, correlation matrix, panel data static estimators, amongst others. The findings obtained from the analysis show that internal corporate governance has a positive and significant influence on firm valuation and that external corporate governance has a negative and insignificant influence on firm valuation. This study recommended that firms should normalize having an independent board where the external constituents (non-executive directors) are more than the internal constituent (executive directors). The firms should also ensure that there is frequent board meetings where the members of the board are familiarized with the operations of the organization to enhance proper and consistent monitoring and control to mention a few.
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HF5601 Accounting