Interactive Effect of Voluntary Disclosure on Value Relevance of Accounting Information: Evidence from Listed Conglomerate Firms in Nigeria
Abstract
This study investigates the interactive (moderating) effect of voluntary disclosure on the value relevance of accounting information—specifically earnings per share and book value per share —in explaining share prices among listed conglomerates on the Nigerian Exchange Group from 2015 to 2024. Grounded in agency theory, signaling theory, and the efficient market hypothesis, the research extends the Ohlson (1995) valuation model by incorporating voluntary disclosure as a moderator. Secondary panel data from 12 conglomerates (120 firm-year observations) were analyzed using fixed-effects regression, with voluntary disclosure measured through a self-constructed index based on content analysis of annual reports. The findings reveal that: (1) EPS and BVPS have significant positive direct effects on share prices, with BVPS showing greater explanatory power; (2) voluntary disclosure exerts a direct positive but modest influence on share prices; and (3) voluntary disclosure significantly and positively moderates the relationships between both EPS and BVPS and share prices, with a stronger moderating effect on EPS (interaction coefficient = 0.021, p < 0.001) than on BVPS (0.018, p < 0.01). These results are robust across diagnostic tests and indicate that voluntary disclosure enhances transparency, reduces information asymmetry, and improves the informativeness of core accounting metrics in Nigeria’s post-IFRS conglomerate sector. The study contributes novel evidence of voluntary disclosure’s moderating role in an emerging market context, addresses a gap in prior Nigerian value relevance research, and offers practical implications for regulators, corporate managers, and investors. Recommendations include incentivizing higher-quality voluntary disclosures and integrating them into valuation assessments to support capital market efficiency in Nigeria.
Keywords
Value relevancevoluntary disclosureearnings per sharebook value per sharemoderation effectNigerian conglomeratespost-IFRSOhlson modelpanel regression.
References
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