Abstract
Corporate disclosure quality has become an important issue in modern financial reporting because of its influence on information asymmetry, investor decision-making, market efficiency, and the valuation of listed companies. Corporate disclosure quality refers to the extent to which companies provide financial and non-financial information that is accurate, relevant, complete, timely, reliable, understandable, and accessible to users of financial reports. High-quality corporate disclosures enable investors to evaluate a company's financial position, performance, risks, governance practices, and future prospects more effectively, thereby reducing uncertainty and improving the quality of investment decisions. Share price represents the market's assessment of the value and future prospects of a company's equity and is influenced by information available to existing and potential investors. In Nigeria, listed companies operate within an environment characterized by economic uncertainty, inflation, exchange rate fluctuations, changing interest rates, regulatory developments, and varying levels of investor confidence. These conditions increase the importance of credible and transparent corporate disclosures in ensuring that market participants have sufficient information for appropriate valuation of securities. Regulatory institutions such as the Financial Reporting Council of Nigeria (FRCN), the Securities and Exchange Commission (SEC), and the Nigerian Exchange Group (NGX) have introduced financial reporting, corporate governance, and disclosure requirements aimed at improving the quality and reliability of information available to investors. Despite these regulatory initiatives, concerns remain regarding incomplete disclosures, delayed financial reporting, selective disclosure, earnings management, inadequate risk disclosures, and inconsistent compliance with financial reporting requirements. Such weaknesses may increase information asymmetry and influence the pricing of securities in the Nigerian capital market. Although previous studies have examined financial disclosure and share price performance, empirical evidence regarding the influence of corporate disclosure quality on the share price of listed companies in Nigeria remains limited and inconclusive. Against this background, this study investigates the influence of corporate disclosure quality on the share price of listed companies in Nigeria. The study is anchored on Information Asymmetry Theory, Signaling Theory, and the Efficient Market Hypothesis (EMH). Information Asymmetry Theory explains that differences in access to corporate information between managers and investors can increase uncertainty and affect investment decisions, while high-quality disclosure reduces such information gaps. Signaling Theory argues that companies with strong financial positions and effective governance practices can use high-quality disclosures to communicate positive signals about their performance and future prospects to investors. The Efficient Market Hypothesis suggests that publicly available corporate information is incorporated into security prices as investors respond to new information, thereby establishing a relationship between disclosure quality and share price. Collectively, these theories provide a comprehensive framework for explaining how the quality of corporate disclosure can influence the market valuation of listed companies in Nigeria. The study adopts a quantitative research design using a structured questionnaire administered to investment analysts, portfolio managers, stockbrokers, institutional investors, individual investors, accountants, chief financial officers, financial controllers, internal auditors, external auditors, company secretaries, and other professionals involved in financial reporting and investment decisions within selected listed companies in Nigeria. A stratified random sampling technique will be employed to ensure adequate representation of companies operating in the financial services, manufacturing, consumer goods, industrial goods, oil and gas, telecommunications, agriculture, healthcare, and other sectors listed on the Nigerian Exchange Group (NGX). Corporate disclosure quality will be measured using financial disclosure completeness, reporting accuracy, disclosure timeliness, voluntary disclosure, mandatory disclosure compliance, risk disclosure, corporate governance disclosure, sustainability disclosure, and accessibility of corporate information, while share price will be measured using market price per share, share price growth, share price stability, market reaction to corporate disclosures, and stock market valuation. Primary data collected from respondents will be analyzed using descriptive statistics to summarize respondents' demographic characteristics and perceptions regarding corporate disclosure quality and share price. Structural Equation Modeling (SEM) will be employed to examine the influence of corporate disclosure quality on share price. The measurement model will be evaluated using Cronbach's Alpha, Composite Reliability (CR), Average Variance Extracted (AVE), and Confirmatory Factor Analysis (CFA) to establish the reliability and validity of the research instrument. Additional diagnostic tests, including multicollinearity assessment, common method bias analysis, and model fit indices such as the Comparative Fit Index (CFI), Tucker-Lewis Index (TLI), Root Mean Square Error of Approximation (RMSEA), and Standardized Root Mean Square Residual (SRMR), will be conducted to ensure the adequacy, consistency, reliability, and robustness of the structural model. The study anticipates that corporate disclosure quality will have a significant positive influence on the share price of listed companies in Nigeria. High-quality corporate disclosures are expected to reduce information asymmetry, improve investor confidence, enhance the credibility of corporate financial information, and facilitate more accurate valuation of listed securities. Companies with comprehensive and timely disclosures are also anticipated to attract greater investor attention, increase market liquidity, strengthen corporate reputation, and experience more favourable market valuations. Furthermore, transparent disclosure of financial performance, corporate governance practices, risks, strategic developments, and sustainability-related information is expected to enable investors to make more informed investment decisions and respond more efficiently to corporate information. Conversely, poor disclosure quality, delayed reporting, incomplete information, selective disclosure, and inadequate risk reporting may increase uncertainty, reduce investor confidence, and negatively influence share price performance. Consequently, improvements in corporate disclosure quality are expected to contribute significantly to enhancing share price stability, market valuation, investor confidence, and capital market efficiency in Nigeria. This study is expected to make significant theoretical and empirical contributions to the literature on financial reporting, accounting, corporate governance, and capital market studies by providing comprehensive evidence on the relationship between corporate disclosure quality and the share price of listed companies in Nigeria. Unlike previous studies that broadly examined financial reporting quality or disclosure practices, this research specifically evaluates corporate disclosure quality as a determinant of share price using primary data and Structural Equation Modeling (SEM). The findings will provide valuable insights for the Financial Reporting Council of Nigeria (FRCN), the Securities and Exchange Commission (SEC), the Nigerian Exchange Group (NGX), listed companies, investors, stockbroking firms, investment analysts, professional accounting bodies, policymakers, regulators, and academic researchers regarding the importance of high-quality corporate disclosure in improving market transparency and security valuation. The study will also provide evidence-based recommendations for strengthening corporate disclosure requirements, improving compliance with financial reporting standards, enhancing corporate governance reporting, promoting timely disclosure of material information, improving investor communication, and fostering greater transparency and efficiency in the Nigerian capital market.
Keywords: Corporate disclosure quality, share price, listed companies, financial disclosure, information asymmetry, investor confidence, corporate governance, financial reporting, Structural Equation Modeling (SEM), Nigeria.
