Rethinking market valuation: Examining human resource accounting disclosures and debt management on shareholder value in Nigerian manufacturing firms

Human Resource Accounting Disclosures (HRAD), which accounts for the cost and value of people in an organisation, has a profound impact on the shareholder value. This study was therefore, designed to research the impact of HRAD on shareholder value, as well as, examine whether financial leverage influences this relationship in Nigerian manufacturing firms. While the study was framed on Stakeholder Theory, Signalling Theory served as additional interpretive insight. With the application of panel regression techniques, which entails Random Effects and Driscoll–Kraay corrected model, a panel dataset of 29 deliberately selected manufacturing firms listed on the Nigerian Exchange over an eight-year period (2016–2023), was subjected to analysis. Shareholder value is represented by the Price-Earnings Ratio (PER), while HRAD is fragmented into five specific disclosure categories. Thus, it is discovered that the only statistically significant component, with positive effect on the PER, is the Performance and Remuneration (PAR) disclosure. Furthermore, there is a supposed conditional role of HRAD in more leveraged firms, due to the relationship between SHS and financial leverage (DER), under robust estimation. The discoveries of the research foreground the need for firms to emphasise performance-related HR disclosures. Providing vivid guidelines by regulatory bodies will motivate consistent and value-relevant human capital reportage. Employing empirical insight into the scarcely-explored relationship between HR disclosure practices and market valuation in an emerging African context, the study establishes both theoretical contributions and practical relevance for corporate transparency and investor relations, in the Nigerian manufacturing sector. Keywords: Financial Leverage, Human Resource Accounting Disclosure (HRAD), Nigerian Manufacturing Firms, Performance and Remuneration, Shareholder Value, Signalling Theory, Stakeholder Theory.