ESGs PRACTICES AND ECONOMIC PERFORMANCE OF MANUFACTURING FIRMS: A COMPARATIVE STUDY OF NIGERIA AND GHANA
Keywords:
Environmental, Social, Governance practices, Economic performance, Nigeria, GhanaAbstract
This study assessed the effect of environmental, social and governance practices on economic performance of manufacturing firms in Nigeria and Ghana. Specifically, the study compared the degree of effect of each of the elements of ESG on cash value added of firms listed on Nigeria and Ghana Exchange Group. The study employed a longitudinal research design because it involves the evaluation of the behaviour of the same variables over an extended period of time. The population of the study comprised all manufacturing firms in both Nigeria and Ghana listed on the Exchange Group and Stock Exchange respectively, and a sample of eleven (11) manufacturing firms in both Nigeria and Ghana was taken. The study used secondary data which were sourced from the various annual reports of the sampled manufacturing firms deposited in the libraries and website of the NGX (www.ngxgroup.com) and GSE (www.gse.com) which covered a period of twelve (12) financial years (2012-2023). Data were analyzed with descriptive statistics, and the hypotheses were tested with inferential statistics panel regression analysis. The evidence provided by the regression result showed that ESGs had a negative coefficient of -100528.7 and a p-value of 0.000 but was significant at 5% level for Nigeria manufacturing firms; while the outcome showed a positive coefficient of 1842.176 and p-value of 0.090 for Ghanaian manufacturing firms, but has no significant effect on cash value added. Based on the findings, the study recommended that the management of both countries manufacturing firms needs to adequately be aware of the importance of environmental, social and governance which may improve the performance of the firms, and spend extensively in it as this will be a great catalyst for their growth, productivity, and development. This will result in an increase in management efficacy.
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