Human Capital Investment and Value Relevance in Nigeria’s Financial Sector: The Moderating Role of Firm Size

This study examines the influence of human capital investment on firm value in the Nigerian financial services sector while assessing whether firm size strengthens or weakens this relationship. Grounded in Human Capital Theory and the Resource Based View, the study employs an ex post facto research design using panel data from 28 listed financial institutions covering the period 2014 to 2023. Tobin's Q serves as the proxy for market-based value relevance, while human capital investment is measured as training expenditure relative to revenue. The analysis applies fixed effects panel regression supported by heteroskedasticity-robust standard errors to control for unobservable firm-specific effects. Further robustness checks are conducted using Driscoll–Kraay standard errors and quantile regression to address cross-sectional dependence and heterogeneity along the valuation distribution. The findings demonstrate that human capital investment exerts a significant positive effect on firm value, confirming its role as a strategic resource capable of generating market-recognised performance outcomes. In contrast, firm size exhibits a negative main effect and weakens the value-enhancing impact of human capital investment. These results suggest that the monetisation of workforce capabilities in Nigeria depends on organisational agility and structural efficiency. The study provides evidence-based implications for managers, investors, and regulators regarding resource allocation, workforce development, and valuation practices.