Firm-Level Corporate Governance and Firm Value of Deposit Money Banks Listed in the Nigerian Exchange Group

The study examines corporate governance and firm value of Deposit Money Banks (DMBs) listed in the Nigerian Stock Exchange during the period 2012 to 2021. Although the relationship between firm value and corporate governance has been examined, however, it remains unclear as to whether this relationship is causal, i.e. the whether the relationship is bidirectional, specifically from an emerging economy such as Nigeria. The study used longitudinal research design, taking a census of the entire thirteen (13) DMBs during the period 2012 to 2021, secondary data sourced from the audited annual reports of the samples banks. Both the 2 Stage Least Square (2SLS) and the Generalized Method of Moments (GMM) were adopted. Giving that the GMM estimates failed the AR (2) test which is a fundamental requirement for its reliability, the study based its inferences on the estimates from the 2SLS technique. The result revealed that both corporate governance and firm value are causal. On specific components of corporate governance, board independence, board size, managerial, institutional and foreign ownership had significant impact on firm value at 5% while board financial expertise had insignificant impact. Based on the findings, the study concludes that corporate governance impact firm value vice versa. Therefore, the study recommends that firms should actively improve their governance practices in order to achieve higher valuation.