Abstract:

This study investigates the effect of sustainability disclosure on the firm value of listed manufacturing firms of selected countries Africa using a panel dataset covering the period 2011–2024. Drawing on stakeholder and agency theories, the study measures sustainability disclosure through disaggregated environmental, social, and governance (ESG) indices constructed in accordance with the GRI framework, while firm value is proxied by the natural logarithm of market capitalisation. The empirical analysis employs high-dimensional fixed-effects regression to control for firm, year, country, and industry heterogeneity, complemented by country-specific robustness tests and dynamic System GMM estimation to address potential endogeneity and persistence in firm value. The baseline results indicate that environmental, social, and governance disclosures are positively and significantly associated with firm value, with social disclosure exhibiting the strongest valuation relevance. Country-level estimations reveal that the magnitude and significance of these effects vary across institutional settings, although social disclosure remains consistently value enhancing across all country groups. However, the dynamic System GMM results suggest that part of the positive association observed in static models may be driven by reverse causality, highlighting the importance of cautious causal interpretation. The findings demonstrate that sustainability disclosure has become an economically meaningful component of firm valuation in African manufacturing markets, but its impact is shaped by institutional maturity and firm-specific dynamics. The study contributes to the sustainability accounting literature by providing the first large-scale, multi-country manufacturing evidence from Africa using disaggregated sustainability measures and advanced econometric techniques. Practically, the results inform corporate reporting strategy, regulatory standard setting, and investor decision making in emerging African capital markets, while offering insights into how sustainability transparency can support more accountable and resilient economic development.