EXCHANGE RATE UNIFICATION AND FIRM VALUATION: EVIDENCE FROM MARKET AND ENTERPRISE VALUES OF QUOTED MANUFACTURING FIRMS IN NIGERIA

This study investigates how exchange rates unification impacts the value of publicly traded manufacturing companiesin Nigeria, using market value and enterprise value as key indicators for future valuation. The research utilized an expost facto design along with a balanced panel dataset of selected firms from 2013 to 2022. To represent exchange rateunification, the study used indicators like the bilateral exchange rate (DBER), cross exchange rate (DCER), and thetrade-weighted exchange rate index (DTWI). The analysis of secondary data was conducted using panel regressiontechniques with EViews Version 13, and diagnostic and Hausman tests were performed to ensure the model'srobustness and reliability. The findings indicate that the exchange rate indicators have a negative and statisticallysignificant impact on firm value. Specifically, DBER (β = −0.0115, p < .05), DCER (β = −47.6805, p < .01), andDTWI (β = −0.1652, p < .01) significantly diminish market value (R² = .129, F = 6.49, p < .01), with similar negativeeffects noted for enterprise value (R² = .123, F = 6.14, p < .01). These results suggest that depreciation and volatilityin exchange rates lead to increased operating costs, financial risks, and discount rates, ultimately reducing the overallvaluation of firms. The study advocates for policies aimed at stabilizing exchange rates and enhancing foreignexchange risk management to support the sustainability of firms.