Green Financing and Firm Value of Listed Firms in Nigeria

This study examines the relationship between green financing and firm value of listed firms in Nigeria for the period 2010 to 2024, using a balanced panel dataset of 151 firms quoted on the Nigerian Exchange Group (NGX). Drawing on Stakeholder Theory, Resource-Based View (RBV), and Signalling Theory, the study employs panel regression techniques—specifically fixed effects (FE) and random effects (RE) models—validated through the Hausman specification test, alongside a system Generalised Method of Moments (GMM) estimator to address potential endogeneity concerns. Green financing is operationalised through green bond issuance, environmental capital expenditure, and sustainability-linked financing ratios. Firm value is measured using Tobin's Q and Market-to-Book Value (MBV). Control variables include firm size, industry type, firm age, board size, R&D expenditure, CEO characteristics, ownership structure, and financial performance. The results reveal that green financing exerts a statistically significant positive effect on firm value, suggesting that environmentally responsible financing strategies enhance investor confidence and long-term shareholder wealth creation. Firm size, financial performance, and R&D expenditure also emerge as significant value-enhancing factors. The findings carry implications for corporate managers, investors, policymakers, and regulators in Nigeria's evolving sustainability landscape. This study is the first to offer large-sample, longitudinal panel evidence on green financing and firm value nexus specifically within the Nigerian context, contributing original empirical insights to the sustainability-finance literature.