EFFECT OF CORPORATE DISCLOSURE ON FINANCIAL LIQUIDITY OF QUOTED PHARMACEUTICAL FIRMS IN NIGERIA

Abstract

Most past studies carried out concerning effect of corporate disclosure on financial liquidity both
within and outside Nigeria concentrated on financial disclosure ignoring other aspects of
disclosures. The main objective of this study is to examine effect of corporate disclosure
(environmental disclosure, corporate governance disclosure, risk disclosure and human resources
accounting disclosure) on financial liquidity of quoted pharmaceutical firms in Nigeria. The
research was anchored on stakeholder theory. Ex post facto research design was employed. Five
out of ten top quoted pharmaceutical firms were sampled. The data used were sourced from annual
reports and statement of accounts of the selected firms for the period of six years from 2015-2020.
Augmented Dickey Fuller unit root test and Ordinary Least Square (OLS) were employed in
analyzing the data. The result shows that Environmental Disclosure (ED) has no significant effect
on the financial liquidity of quoted pharmaceutical firms in Nigeria. While, Corporate Governance
Disclosure (CGD), Risk Disclosure (RD) and Human Resources Accounting Disclosure (HRAD)
have significant effect on the financial liquidity of quoted pharmaceutical firms in Nigeria. The
study concludes that corporate disclosure have significant effect on financial liquidity of quoted
pharmaceutical firms in Nigeria. The study recommends that management of pharmaceutical firms
should develop a well articulated environmental management and disclosure system in order to
guarantee a conflict free corporate atmosphere needed by managers and workers for maximum
productivity. Also, pharmaceutical firms should be encouraged to disclose their risk exposure in
their annual reports to enhance their competitiveness which would subsequently lead to high
corporate performance.