ESG RATINGS AND INVESTMENT DECISIONS IN NIGERIA

Purpose: This study investigates the impact of Environmental, Social, and Governance (ESG) ratings on investment decisions in Nigerian publicly listed firms over 2010-2024. Design/methodology/approach: Employing panel data from 148 publicly listed firms, this study utilizes fixed effects and random effects regression models. Investment decisions are measured by capital expenditure intensity and market-to-book ratio. Findings: Results reveal significant positive relationship between ESG ratings and investment decisions (β = 0.284, p < 0.01). Governance exhibits strongest component effect. Practical implications: Findings underscore ESG integration importance for Nigerian firms seeking capital. Policymakers should strengthen ESG disclosure regulations. Originality/value: First comprehensive examination of ESG-investment nexus in Nigeria using fifteen-year longitudinal data.