MODERATING EFFECT OF CORPORATE GOVERNANCE ON THE RELATIONSHIP BETWEEN REAL EARNINGS MANAGEMENT AND MARKET VALUE OF LISTED MANUFACTURING FIRMS IN NIGERIA

The study examined the moderating effect of corporate governance on the relationship between real earnings management and market value of listed manufacturing firms in Nigeria. The study population comprised fifty-one (51) listed manufacturing firms while purposive sampling method was employed having eliminated manufacturing companies that were not listed as at 2014 and not fully in operation for the period under study. Hence, the sample size for the study is 38. Data were sourced from the sampled listed manufacturing firms for the period of eleven (11) years (2011-2021). The analysis of the study was done through panel regression-random effect. The results revealed that board size records a negative moderating effect on the relationship between real earnings management and market value (β=-0.450) which is significant at 5% level of significance (t=-1.965; p<0.05). In addition, institutional ownership records positive moderating effect (β=3.999) which is significant at 5% (t=2.257; p<0.05) on the market value of Nigerian manufacturing firms. The study concluded that real earnings management are detrimental to the market value of manufacturing firms in Nigeria, while institutional shareholding is a key corporate governance mechanism which exerts positive and significant influence on the market value of manufacturing firms in Nigeria. The study therefore recommended that Nigerian manufacturing firms should strengthen corporate governance practices, with specific focus on fostering board independence and attracting institutional ownership.