Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria
This study examines the effect of earnings quality on the firm value of Nigerian firms that manufacture consumer products using static and dynamic models. Earnings quality was proxied by an accrual-based score, and firm value was proxied by the ratio of share price to book value. From 2012 to 202...
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| Format: | Article |
| Language: | English |
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Danubius University
2023-10-01
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| Series: | Journal of Danubian Studies and Research |
| Subjects: | |
| Online Access: | https://dj.univ-danubius.ro/index.php/JDSR/article/view/2497/2621 |
| _version_ | 1797628622333280256 |
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| author | Olola Olayeye Aduwo Bamikole Samson Fajuyagbe Ayomikun Elizabeth Aduwo |
| author_facet | Olola Olayeye Aduwo Bamikole Samson Fajuyagbe Ayomikun Elizabeth Aduwo |
| author_sort | Olola Olayeye Aduwo |
| collection | DOAJ |
| description | This study examines the effect of earnings quality on the firm value of Nigerian firms that
manufacture consumer products using static and dynamic models. Earnings quality was proxied by an
accrual-based score, and firm value was proxied by the ratio of share price to book value. From 2012
to 2021, data from the annual reports of a selection of consumer goods manufacturers listed on the
Nigerian Group of Exchanges was used as a secondary source of information. In this investigation,
panel data regression and panel vector autoregressive are used as estimation methods. According to the
static model, earnings quality has a positive but insignificant effect on the value of a company. In
addition, the results of the granger causality test demonstrated that earnings quality cannot be used to
predict future firm value, and that earnings quality has a negative and insignificant influence on firm
value in the short term. Thus, it was determined that earnings quality has no effect on the long-term or
short-term firm value. The study concluded that earnings quality has no significant effect on the firm
value of Nigerian companies that manufacture consumer products. In light of this, the study
recommends that the management of companies that manufacture consumer products use an accrualbased
score as a measure of earnings quality for informative earnings management, which will increase
firm value. |
| first_indexed | 2024-03-11T10:41:22Z |
| format | Article |
| id | doaj.art-0b76eec7b826404f850c45dc9b34631c |
| institution | Directory Open Access Journal |
| issn | 2284-5224 |
| language | English |
| last_indexed | 2024-03-11T10:41:22Z |
| publishDate | 2023-10-01 |
| publisher | Danubius University |
| record_format | Article |
| series | Journal of Danubian Studies and Research |
| spelling | doaj.art-0b76eec7b826404f850c45dc9b34631c2023-11-14T08:53:21ZengDanubius UniversityJournal of Danubian Studies and Research2284-52242023-10-01132155168Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in NigeriaOlola Olayeye Aduwo0Bamikole Samson Fajuyagbe1Ayomikun Elizabeth Aduwo2Achievers University OwoFederal University of Technology AkureAchievers University OwoThis study examines the effect of earnings quality on the firm value of Nigerian firms that manufacture consumer products using static and dynamic models. Earnings quality was proxied by an accrual-based score, and firm value was proxied by the ratio of share price to book value. From 2012 to 2021, data from the annual reports of a selection of consumer goods manufacturers listed on the Nigerian Group of Exchanges was used as a secondary source of information. In this investigation, panel data regression and panel vector autoregressive are used as estimation methods. According to the static model, earnings quality has a positive but insignificant effect on the value of a company. In addition, the results of the granger causality test demonstrated that earnings quality cannot be used to predict future firm value, and that earnings quality has a negative and insignificant influence on firm value in the short term. Thus, it was determined that earnings quality has no effect on the long-term or short-term firm value. The study concluded that earnings quality has no significant effect on the firm value of Nigerian companies that manufacture consumer products. In light of this, the study recommends that the management of companies that manufacture consumer products use an accrualbased score as a measure of earnings quality for informative earnings management, which will increase firm value.https://dj.univ-danubius.ro/index.php/JDSR/article/view/2497/2621earnings qualityfirm valuepanel regression |
| spellingShingle | Olola Olayeye Aduwo Bamikole Samson Fajuyagbe Ayomikun Elizabeth Aduwo Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria Journal of Danubian Studies and Research earnings quality firm value panel regression |
| title | Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria |
| title_full | Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria |
| title_fullStr | Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria |
| title_full_unstemmed | Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria |
| title_short | Effect of Earnings Quality on the Firm Value of Consumer Goods Manufacturing companies in Nigeria |
| title_sort | effect of earnings quality on the firm value of consumer goods manufacturing companies in nigeria |
| topic | earnings quality firm value panel regression |
| url | https://dj.univ-danubius.ro/index.php/JDSR/article/view/2497/2621 |
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