Financial Innovation and Firm Performance: The Role of Corporate Governance

This study investigates the relationship between financial innovation and firm performance among 148 listed firms on the Nigerian Exchange Group (NGX) over the period 2010 to 2025, with a specific focus on the moderating role of corporate governance. Drawing on agency theory, dynamic capabilities theory, and the resource-based view (RBV), the study develops and tests hypotheses that financial innovation positively influences firm performance and that corporate governance mechanisms strengthen this relationship. Using an ex-post facto research design and panel data regression techniques, including fixed effects, random effects, and the system generalised method of moments (GMM), the findings reveal that financial innovation exerts a significant positive effect on firm performance as measured by return on assets (ROA), Tobin's Q, and earnings per share (EPS). Corporate governance, operationalised through board size, board independence, audit committee effectiveness, and ownership concentration, moderates this relationship positively, amplifying the performance-enhancing effects of financial innovation. The results are robust across multiple estimation techniques and post-estimation diagnostics. Control variables, including firm size, leverage, Big 4 audit firm dummy, industry dummies, and year dummies, were incorporated to ensure the reliability. These findings carry important implications for regulatory bodies, firm managers, investors, and policymakers in emerging market economies, particularly Nigeria, where financial innovation is expanding rapidly, but governance structures remain fragmented. The study contributes original empirical evidence to the global discourse on fintech, corporate governance, and sustainable firm performance in Africa's largest economy.