FINANCIAL PERFORMANCE AND SHARE PRICE OF LISTED MANUFACTURING FIRMS IN NIGERIA: THE MODERATING ROLE OF FAIR VALUE ACCOUNTING

Abstract

The study examines the moderating role of fair value accounting on the nexus between

financial performance and share price of listed Nigerian manufacturing companies. The

study explores 18 manufacturing companies listed on the Nigerian Exchange Group

(NGX) spanning from 2017 to 2023. Secondary data was obtained from the annual

audited report and accounts of the listed firms, which were available on their websites.

Panel-Corrected Standard Error (PCSE) estimation technique was used due to its

capability to correct for heteroskedasticity and autocorrelation among firms and across

time. Findings show that Earnings per Share (EPS), Book value per share (BVS), and

Fair value accounting (FVI) have a positive and statistically significant effect on the

share price of Nigerian manufacturing firms. This portrays share price to be a good

reflection of change in EPS of manufacturing firms in Nigeria. Furthermore, results

show that fair value accounting has a statistically significant and negative effect on the

relationship between EPS and share price. Nevertheless, this shows that fair value

accounting reduces the nexus between financial performance and market valuation.

This study stands out by exploring fair value accounting as a moderating factor within

the value relevance framework, an approach that is rarely applied in studies of emerging

markets like Nigeria.