ESG AND CORPORATE VALUE: A PLS-SEM ANALYSIS OF HETEROGENEOUS IMPACTS AMONG NIGERIAN BANKS

Abstract This study investigates the heterogeneous impacts of Environmental, Social, and Governance (ESG) factors on corporate value in the Nigerian banking sector. Despite the recognized role of capital markets in economic development, the impact of ESG on firm value in emerging markets, particularly in sub-Saharan Africa, has been largely unexplored. Using Partial Least Squares Structural Equation Modelling (PLS-SEM) on data from 2015 to 2024 from 13 listed Nigerian deposit money banks (DMBs), we analyze firm-level data to assess how varying ESG dimensions, collectively and individually, influence corporate value. We find that governance exerts the strongest effect on corporate value, followed by environmental and social dimensions. Variations in ESG impacts among banks reflect differences in institutional frameworks and managerial priorities. The study contributes to the sustainable finance literature by providing nuanced insights into how ESG elements influence corporate valuation in emerging markets, as well as guidance for regulators, policymakers, investors, and bank executives on how to leverage sustainability for competitive advantage and value creation. The study adds to the ESG literature by demonstrating the utility of heterogeneity analysis and PLS-SEM in evaluating multidimensional relationships. JEL Classification: G21, M14, Q56.