The Effect of Disclosure Practices on Investors’ Confidence among Manufacturing Companies in Ogun State, Nigeria

Abstract

This study examined the effect of disclosure practices on investors’ confidence among manufacturing firms in Ogun State, Nigeria, using Lafarge Africa Plc as the focal company. The study was motivated by the growing importance of corporate transparency and the need to understand how different forms of disclosure influence investors’ perceptions and confidence in investment decisions. Specifically, the study investigated the effects of financial disclosure, voluntary disclosure, and risk disclosure on investors’ confidence. A quantitative cross-sectional survey research design was adopted. The population comprised 123,919 registered shareholders of Lafarge Africa Plc between 2021 and 2025. Using Yamane’s formula, a sample size of 399 investors was determined, while stratified random sampling was employed to ensure adequate representation of different categories of shareholders. Data were collected through a structured questionnaire adapted from validated instruments and analyzed using descriptive statistics and multiple regression analysis. Out of the 399 questionnaires distributed, 384 valid responses were obtained, representing a response rate of 96.2%.  The findings revealed that financial disclosure has a significant positive effect on investors’ confidence (β = 0.45, t = 7.21, p < 0.05), explaining 42 percent of the variance in investor confidence. Voluntary disclosure also exerted a significant positive effect (β = 0.36, t = 5.90, p < 0.05), accounting for 33 percent of the variance. Similarly, risk disclosure was found to significantly influence investors’ confidence (β = 0.21, t = 3.50, p < 0.05), explaining 20 percent of the variance. The composite regression model was also statistically significant (F = 38.75, p < 0.05), showing that financial, voluntary, and risk disclosures collectively explained 61 percent of the variance in investors’ confidence (R² = 0.61), with financial disclosure emerging as the strongest predictor. The study concluded that disclosure practices play a critical role in enhancing investors’ confidence in manufacturing firms. Comprehensive, accurate, timely, and transparent disclosure of financial, voluntary, and risk-related information strengthens investor trust and supports informed investment decisions. The study recommends that manufacturing firms improve the quality and comprehensiveness of their disclosure practices, while regulators should encourage standardized disclosure frameworks to enhance transparency and investor confidence.

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