Firm Age, Firm Size And Environmental, Social And Governance Disclosure In Nigeria

Abstract

This study examines the effect of firm-specific characteristics on Environmental, Social, and Governance (ESG) disclosure among companies listed on the Nigerian Exchange Group. Drawing on legitimacy and stakeholder theories, the study focuses on firm size and firm age as key explanatory variables, while controlling for profitability. Using panel data from 41 listed firms over the study period, panel regression techniques are employed, including pooled ordinary least squares (OLS), random effects (RE), and fixed effects (FE) models. Post-estimation diagnostics indicate that the fixed effects model, corrected using panel-corrected standard errors (PCSE), provides the most appropriate specification. The empirical findings reveal a strong and positive relationship between firm size and ESG disclosure, suggesting that larger firms are more responsive to stakeholder pressure and regulatory expectations. Conversely, firm age exhibits a negative and statistically significant effect on ESG disclosure in the fixed effects models, indicating that older firms may rely more on established reputational capital rather than expanding sustainability reporting practices. Therefore, the results highlight that while firm size aligns with global evidence as a key driver of ESG disclosure, firm age displays contrasting effect in the Nigerian context. The study contributes to the limited literature on ESG disclosure in emerging markets and provides relevant insights for policymakers, investors, and corporate managers seeking to strengthen sustainability reporting practices in Nigeria.