Environmental Performance and Value of Listed Industrial Goods Firms in Nigeria: Mediating Through Financial Performance
DOI:
https://doi.org/10.61143/umyu-jafr.7(1)2024.011Keywords:
Environmental performance, financial performance, value in Nigerian industrial goods firmsAbstract
This study examined the mediating effect of financial performance on the relationship between environmental performance and value of listed industrial goods firms in Nigeria. Data for the study was extracted from the annual reports and accounts of the sampled firms for the period of fourteen (14) years (2010-2023). The data collected was analyzed using descriptive statistics to provide summary statistics for the variables, while correlation analysis was carried out to assess the correlation between the dependent and explanatory variables. Structural Equation Modeling (SEM) was used to estimates the relationship between environmental performance and firm value, and subsequently, to test significance of indirect effects the path model (Monte Carlo simulation) approaches was employed for mediation analysis. The study found that Employee Health and Safety Cost (EHSC) one of the proxies of environmental performance influences financial performance. More so, Staff Development Cost (SDC) as proxy for environmental performance affects value of listed industrial goods firms in Nigeria. In the same vein, financial performance has insignificant impact on firm value of the sampled firms and financial performance is not proven as a variable that mediates the relationship between environmental performances on firm value. The study recommends that the management of listed industrial goods companies in Nigeria should prioritize and invest in environmental initiatives, recognizing that strong environmental performance can directly enhance firm value. Finally, management should invest in staff training and development focused on sustainability can equip employees with the skills necessary to implement and manage environmental initiatives effectively.
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