Moderating Role of Corruption Control on Firm Level Determinants of Corporate Sustainability Disclosure Compliance in Nigeria
DOI:
https://doi.org/10.25115/eea.v39i4.4428Keywords:
Environmental and Social Information, Corporate Governance, Compliance, Corruption ControlAbstract
This paper explores the moderating effect of corruption control in strengthening the influence of firm attributes on corporate sustainability disclosure compliance in Nigeria. The study focuses on the existing discussion on mandatory disclosure compliance with a corporate governance code. The extent of disclosure compliance is measured using a total unweighted disclosure index, developed from a panel data set of 118 companies listed on the Nigerian capital market. The companies were selected using a proportionate stratified sampling technique. The dataset for the period of 2011 to 2017 were first analyzed by static panel regression analysis. The regression models were subjected to further robustness checks under dynamic GMM panel regression analysis, to test for possible endogeneity. The findings revealed the significant moderating effect of corruption control, evidenced from the interaction of corruption control with selected firm attributes, namely; industry type, leverage and taxation. The research contributes to the existing literature, as it establishes the importance of control of corruption as an additional factor of corporate sustainability disclosure compliance within the context of Nigeria.
Downloads
References
Acemoglu, D., Johnson, S., Robinson, J., & Thaicharoen, Y. (2003). Institutional causes, macroeconomic symptoms: volatility, crises and growth. Journal of Monetary Economics, 50, 49–123.
Adelopo, I. (2011). Voluntary disclosure practices amongst listed companies in Nigeria. Advances in Accounting, Incorporating Advances in International Accounting, 27(2), 338–345. https://doi.org/10.1016/j.adiac.2011.08.009
AKhtaruddin, M., Hossain, M. A., Hossain, M., & Yaho, L. (2009). Corporate governance and voluntary disclosure in corporate annual reports of Malaysian listed firms. Journal of Applied Management Accounting Research, 7(1), 1–20.
Atwood, T. J., Drake, M. S., Myers, J. N., & Myers, L. A. (2012). Home country tax system characteristics and corporate tax avoidance: International evidence. The Accounting Review, 87(6), 1831–1860.
Branco, M. C., & Matos, D. (2016). The fight against corruption in Portugal : evidence from sustainability reports. 23(1), 132–142. https://doi.org/10.1108/JFC-05-2014-0027
Business Anti-Corruption Portal BAP. (2018). Nigeria Corruption Report. Retrieved November 19, 2017, from GAN Integrity Inc. website: https://www.business-anti-corruption.com/country-profiles/nigeria/
Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32(3), 948–967.
Cooke, T. E. (1989). Disclosure in the corporate annual reports of Swedish companies. Research, Accounting and Business, 19(74), 113–124.
DiMaggio, P., & Powell, W. (1983). The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.
Eltaib, E. E., & Complete, A. (2012). Environmental accounting disclosures of Australian oil and gas companies. University of Wollongong.
Garas, S., & ElMassah, S. (2018). Corporate governance and corporate social responsibility disclosures. Critical Perspectives on International Business, 14(2–26), cpoib-10-2016-0042. https://doi.org/10.1108/cpoib-10-2016-0042
Gutierrez, H. P., Hlaciuc, E., Mates, D., & Maciuca, G. (2016). Empirical study of financial disclosure compliance with IFRS: Evidence from listed Romanian companies. Journal of Accounting and Auditing: Research & Practice, 2016(July), 11. https://doi.org/10.5171/2016.794159
Healy, P. M., & Serafeim, G. (2015). An analysis of firms’ self-reported anticorruption efforts. The Accounting Review, 91(2), 489–511.
Iatridis, G. E. (2013). Environmental disclosure quality : Evidence on environmental performance , corporate governance and value relevance. Emerging Markets Review, 14, 55–75. https://doi.org/10.1016/j.ememar.2012.11.003
Issa, A., & Alleyne, A. (2018). Corporate disclosure on anti-corruption practice. Journal of Financial Crime, 25(4), 1077–1093. https://doi.org/10.1108/JFC-05-2017-0045
Joseph, C., Gunawan, J., Sawani, Y., Rahmat, M., Noyem, J. A., & Darus, F. (2016). A comparative study of anti-corruption practice disclosure among Malaysian and Indonesian corporate social responsibility (CSR) best practice companies. Journal of Cleaner Production, 112, 2896–2906.
Joshi, P. L., Ling, L. C., Yin, L. W., & Deshmukh, A. (2016). Disclosure choices, corporate characteristics and compliance with IFRS practice statement management commentary: An empirical study of Malaysian listed companies. Global Business and Economics Review, 18(6), 679–703. https://doi.org/10.1504/GBER.2016.079411
Kachouri, M., & Jarboui, A. (2017). Exploring the relation between corporate reporting and corporate governance effectiveness. https://doi.org/10.1108/JFRA-06-2016-0053
Kamarudin, F., Sufian, F., & Annuar Md. Nassir. (2016). Does country governance foster revenue efficiency of Islamic and conventional banks in GCC countries? EuroMed Journal of Business, 11(2), 181–211.
Krasniqi, B. A., & Mustafa, M. (2016). Small firm growth in a post-conflict environment: the role of human capital, institutional quality, and managerial capacities. International Entrepreneurship and Management Journal, 12(4), 1165–1207. https://doi.org/10.1007/s11365-016-0384-9
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30(3), 607–610. https://doi.org/https://doi.org/10.1177/001316447003000308
Lama, T., & Anderson, W. W. (2015). Company characteristics and compliance with ASX corporate governance principles. Pacific Accounting Review, 27(3), 373–392. Retrieved from http://sci-hub.cc/10.1108/par-12-2013-0104%0A
Lasagni, A., Nifo, A., & Vecchione, G. (2015). Firm productivity and institutional quality: Evidence from italian industry. Journal of Regional Science, 55(5), 774–800. https://doi.org/10.1111/jors.12203
Law, S. H., & Azman-Saini, W. N. W. (2012). Institutional quality, governance, and financial development. Economics of Governance, 13(3), 217–236. https://doi.org/10.1007/s10101-012-0112-z
Lin, K. Z., Cheng, S., & Zhang, F. (2017). Corporate Social Responsibility, Institutional Environments, and Tax Avoidance: Evidence from a Subnational Comparison in China. International Journal of Accounting, 52(4), 303–318. https://doi.org/10.1016/j.intacc.2017.11.002
Onyali, C. I., Okafor, G. T., & Egolum, P. (2014). An Assessment of environmental information disclosure practices of selected Nigerian manufacturing companies. International Journal of Finance and Accounting, 3(6), 349–355. https://doi.org/10.5923/j.ijfa.20140306.03
Powell, W. W. (1988). Institutional effects on organizational structure and performance. Institutional Patterns AndOrganizations: Culture and Environment, 115–136.
Qureshi, M. I., Khan, N., Qayyum, S., Malik, S., Sanil, H. S., & Ramayah, T. (2020). Classifications of sustainable manufacturing practices in ASEAN region: A systematic review and bibliometric analysis of the past decade of research. Sustainability, 12(21), 8950.
Said, R. M., Sulaiman, M., & Ahmad, N. N. N. (2014). Environmental information usefulness to stakeholders : empirical evidence from Malaysia. Social Responsibility Journal, 10(2), 348–363. https://doi.org/10.1108/SRJ-10-2012-0131
Salihu, H. A., & Gholami, H. (2019). Corruption in the Nigeria Judicial System : An Overview. Journal of Financial Crime, 25(3), 669–680. https://doi.org/10.1108/JFC-01-2017-0005
Sarhan, A. A., & Ntim, C. G. (2018). Firm- and country-level antecedents of corporate governance compliance and disclosure in MENA countries. Managerial Auditing Journal, 33(6–7), 558–585. https://doi.org/10.1108/MAJ-10-2017-1688
SEC. (2011). Code of Corporate Governance For Public Companies in Nigeria. Code, pp. 1–60. Retrieved from http://sec.gov.ng/regulation/rules-codes/%0A
SEC. (2018). Listed Cimpanies in Nigeria. Retrieved April 3, 2018, from http://www.nse.com.ng/Listings-site/listed-securities/listed-companies
Sekaran, U. (2003). Research methods for business a skill building approach (4th ed.). USA: John Wiley & Sons Inc.
Shan, S., Lin, Z., Li, Y., & Zeng, Y. (2018). Attracting Chinese FDI in Africa: The role of natural resources, market size and institutional quality. Critical Perspectives on International Business, 14(2–3), 139–153. https://doi.org/10.1108/cpoib-11-2016-0055
Trading Economics. (2020). Nigeria corruption rank. Retrieved from https://tradingeconomics.com/nigeria/corruption-rank
Tresierra, A. E., & Reyes, S. D. (2018). Effects of institutional quality and the development of the banking system on corporate debt. Journal of Economics, Finance and Administrative Science, 23(44), 113–124. https://doi.org/10.1108/JEFAS-03-2017-0053
UN. (2017a). Corruption in Nigeria Bribery: public experience and response. Retrieved from https://www.unodc.org/documents/data-and-analysis/Crime-statistics/Nigeria/Corruption_Nigeria_2017_07_31_web.pdf
UN. (2017b). The emissions gap report 2017. Retrieved April 9, 2017, from https://wedocs.unep.org/bitstream/handle/20.500.11822/22070/EGR_2017.pdf
Wachira, M. (2017). Determinants of Corporate Social Disclosures in Kenya : A Longitudinal Study of Firms Listed on the Nairobi Securities Exchange. European Scientific Journal, 13(11), 112–132. https://doi.org/10.19044/esj.2017.v13n11p112
World Bank. (2018). Combating corruption. Retrieved November 20, 2018, from http://www.worldbank.org/en/topic/governance/brief/anti-corruption
