The Effects of Governance Quality and Policy Framework on Sustainable Business Performance in Nigeria

Abstract

This study investigates the effects of governance quality and regulatory quality on sustainable business performance among publicly listed firms in Nigeria. Grounded in Institutional Theory, Stakeholder Theory, and the Triple Bottom Line (TBL) framework , the study examines how institutional quality influences firms' economic, environmental, and social sustainability performance. A quantitative longitudinal panel design was employed using a balanced panel of 50 Nigerian listed firms observed annually from 2015 to 2025, yielding 550 firm-year observations. Governance quality and regulatory quality were measured using data from the World Bank's Worldwide Governance Indicators (WGI ), while sustainable business performance was measured through a manually constructed Triple Bottom Line disclosure index derived from audited annual, integrated, and sustainability reports. The data were analysed using descriptive statistics, Pearson correlation analysis, multicollinearity diagnostics, and Random Effects panel regression with heteroskedasticity -robust standard error s. The findings reveal that both governance quality and regulatory quality exert positive and statistically significant effects on sustainable business performance, with governance quality emerging as the stronger predictor. These results suggest that impro vements in institutional effectiveness, regulatory consistency, and public governance create an enabling environment that encourages firms to adopt sustainable business practices and achieve superior long-term performance. The study contributes to the grow ing literature on institutional quality and corporate sustainability in emerging economies by providing firm -level empirical evidence from Nigeria and demonstrating the complementary roles of governance quality and regulatory quality in promoting sustainab le business performance. The findings have important implications for policymakers, regulators, and corporate managers seeking to strengthen institutional effectiveness and advance sustainable enterprise development. Although the study relies on secondary panel data and therefore establishes associations rather than definitive causal relationships, it provides a robust foundation for future research employing dynamic panel methods, quasi-experimental designs, or mixed method approaches to further examine the institutional drivers of corporate sustainability.