Effect of Fair Value Measurement and Corporate Governance on Investors Confidence in Nigerian Deposit Banks

Abstract

This study examined the effect of fair value measurements and corporate governance mechanisms on investor confidence in deposit money banks in Nigeria. An ex post facto research design was adopted, and secondary data were obtained from the published annual reports of eight selected deposit money banks covering the period from 2020 to 2024. Descriptive statistics were used to summarise the data, while inferential analysis was conducted using a fixed effects regression model after appropriate diagnostic tests, including the Redundant Fixed Effects test and the Hausman test, were performed to establish model suitability. The study employed fair value assets, stakeholder engagement, and board independence as the explanatory variables, with investor confidence serving as the dependent variable. The empirical findings revealed that fair value assets have a positive and statistically significant effect on investor confidence, underscoring the relevance of timely, transparent, and value relevant financial information in influencing investor perceptions. Although stakeholder engagement and board independence exhibited positive relationships with investor confidence, their effects were statistically weaker. The study contributes to existing literature by integrating fair value accounting practices and corporate governance mechanisms from a stakeholder oriented perspective within the context of the Nigerian banking sector. The findings offer practical implications for regulators, bank management, and policymakers by highlighting the need to strengthen fair value reporting practices, enhance stakeholder participation, and reinforce board independence in order to improve accounting transparency and sustain investor confidence in deposit money banks.