Clean Energy Transition Announcements and Stock Market Reactions: Evidence from Listed Firms in Nigeria

This paper examines how the Nigerian stock market responds to clean energy transition announcements (CETAs) made by listed firms on the Nigerian Exchange Group (NGX) over the period 2010–2024. Drawing on a panel dataset of 151 listed firms and employing event study methodology in combination with fixed-effects panel regression, this study estimates cumulative abnormal returns (CARs) around announcement windows and investigates how firm-level characteristics moderate investor response. The empirical results reveal a statistically significant positive market reaction to CETAs, with the key independent variable returning a coefficient of 0.0201 (p < 0.05) in the baseline fixed-effects model. Firm profitability (FP) and growth opportunities (GO) positively reinforce market responses, whereas firm leverage (FLEV) significantly dampens investor enthusiasm. Firm size (FS) and liquidity (LIQ) also show modest positive associations, while firm age (FA) is not statistically significant. Post-estimation diagnostics confirm the robustness of findings through cluster-robust and Driscoll-Kraay standard errors. These results provide the first systematic, large-sample empirical evidence on ESG-driven market reactions in an African emerging market context and carry important implications for corporate sustainability strategy, investor behaviour, and regulatory policy in Nigeria. The study recommends that Nigerian listed firms develop credible, strategically communicated clean energy roadmaps to leverage capital market incentives and contribute to sustainable development goals.