Tax Transparency and Market Valuation of Listed Companies in Nigeria

Tax transparency has emerged as a fundamental dimension of corporate accountability, with growing scholarly interest in its implications for investor confidence and market valuation. Drawing on a balanced panel dataset of 151 listed companies on the Nigerian Exchange Group (NGX) over the period 2010 to 2024, this study examines the relationship between tax transparency and market valuation, while controlling for firm size (FS), industry type (INDT), firm age (FA), board size (BS), research and development expenditure (R&DE), CEO characteristics (CEOC), ownership structure (OWNS), and financial performance (FP). Grounded in the signalling theory, agency theory, and the resource-based view, the study employs pooled OLS, fixed effects, and random effects panel regression models, with Tobin's Q and Price-to-Book ratio serving as proxies for market valuation, and the effective tax rate (ETR), book-tax difference (BTD), and tax disclosure index (TDI) operationalising tax transparency. The Hausman test favours the fixed effects estimator as the preferred model. Results reveal that tax transparency exerts a positive and statistically significant effect on market valuation, suggesting that investors in Nigeria's capital market reward firms that disclose tax-related information openly. Firm size, financial performance, and board size are found to be significant moderating factors. Industry type and ownership concentration yield contextually varied effects. The findings contribute to the sparse literature on tax transparency in sub-Saharan Africa and offer actionable policy implications for regulators, boards, and tax authorities in Nigeria.