Value Relevance of Family-Owned Listed Firms’ Accounting Information in Nigeria

Abstract

The study investigates value relevance of accounting information of rarely examined family-owned listed firms in a developing economy, Nigeria. This becomes expedient because of the firms’ exposure to sustainability issue, governance, and financial challenges. Longitudinal research design was employed as the study covered International Financial Reporting Standards’ (IFRS) reporting regime from 2013 to 2022. Secondary data were obtained from purposively selected 34 listed family-owned firms using MachameRatios databank. The data were subjected to both descriptive and panel regression analyses. The results of the Ohlson based price model present value relevance of the listed firms’ earnings and book value of equity, but more for the latter. Firm size displays positive and significant controlling influence on the relationship between the accounting information and share price. The trend analysis shows crisscrossed value relevance of the accounting numbers individually and jointly all through the period under investigation. It was concluded that book value of equity of family-owned listed firms presents higher value relevance in the capital market over earnings consistent with extant studies, but firm size impounds controlling influence. The study recommends that Management of the listed firms should consider enhancing future value of the investors’ stakes by making the earnings more attractive to the potential investors and other capital market players. Thus, the results have implications for the Management of family-owned listed firms, potential investors and the market regulators towards ensuring sustainable corporate economic performance.