The Influence of Managerial Ownership on Environmental Reporting by Listed Nigerian Oil and Gas Companies
DOI:
https://doi.org/10.61143/umyu-jafr.2(1)2021.010Keywords:
Environmental reporting, oil and gas Industry, word counts, legitimacy theoryAbstract
The oil and gas industry is one of the most environmentally sensitive and polluting industries in the world accounting for the highest level of industry sectoral global carbon emissions. Nigerian oil and gas industry is also the most environmentally polluting industry in the country. However, corporate accountability through reporting on their interactions with the environment has contributed immensely to changing corporate behaviour on their interplay with the environment. Consequently, the aim of this study is to examine the environmental accountability of listed Nigerian oil and gas companies 2005 to 2019. To test for the influence of managerial ownership and other corporate variables, Panel Corrected Standard Error Regression Analysis (PCSERA) was employed while vulnerability and exploitability analytical framework is used as guide in the research. Results from the study revealed that sampled companies are devoting few words for environmental disclosure while regression analyses revealed that managerial ownership and size are statistically significant in explaining environmental disclosure by the sampled companies. However, Profitability is significant but negatively related with disclosure by sampled companies. Overall, vulnerability and exploitability analytical framework is found useful in explaining the disclosure practices of sampled companies. Policy makers in the companies should pay attention to environmental accountability which may perhaps bring about peaceful operations in the industry. Similarly, policy makers in the industry may choose to regulate environmental as mechanism of ensuring environmental accountability in the industry.
Metrics
References
Abd El salam, O. H. (1999). The introduction and application of international accounting standards to accounting disclosure regulations of a capital market in a developing country: the case of Egypt. PhD. Heriot- Watt University Edinburgh.
Akrout, M. M. & Othman, H. B. (2013). A study of the determinants of corporate environmental disclosure in MENA emerging markets. Journal of Reviews on Global Economics, 2(), 46-59. https://doi.org/10.6000/1929-7092.2013.02.5
Al-ajmi, M., Al-Muttairi, A. & Al-Duwaila, N. (2015). Corporate social disclosure practices in Kuwait. International Journal of Economics and Finance, 7(9), 244-254. https://doi.org/10.5539/ijef.v7n9p244
Alkababji, M. W. (2014). Voluntary disclosure on corporate social responsibility: a study on the annual reports of Palestinian Corporations. European Journal of Accounting Auditing and Finance Research. 2(4), 59-82.
Aly, D., Simon, J. & Hussainey, K. (2010). Determinants of corporate internet reporting evidence from Egypt Managerial Auditing Journal, 25(2), 182-202. https://doi.org/10.1108/02686901011008972
Akther, T. (2017). Corporate Environmental Reporting and Profitability: A Study on Listed Companies in Bangladesh. Jagannath University Journal of Business Studies, 5(1&2), 99-114.
Barako, D. G., Hancock, P. & Izan, H. Y. (2006b). Factors Influencing Voluntary Corporate Disclosures by Kenyan Companies. Corporate Governance: An International Review, 14(2), 107-125. https://doi.org/10.1111/j.1467-8683.2006.00491.x
Beck, N. & Katz, J. N. (1995). What to do (and not to do) with Time-Series Cross-Section Data. The American Political Science Review, 89(3): pp.634-647. https://doi.org/10.2307/2082979
Beck, N. & Katz, J. N. (2006). Random Coefficient Models for Time-Series-Cross-Section Data: Monte Carlo Experiments. Society for Political Methodology, 21 May, 2015-14.
Beck, N., Katz, J. N., Alvarez, R. M., Garrett, G. & Lange, P. (1993). Government Partisanship, Labour Organization, and Macroeconomic Performance: A Corrigendum. American Political Science Review 87(), 945-48. https://doi.org/10.2307/2938825
Bhattacharyya, A. (2014). Factors Associated with the Social and Environmental Reporting of Australian Companies. Australian Accounting Business and Finance Journal, 8(1), 25-50. https://doi.org/10.14453/aabfj.v8i1.3
Biorn, E. (2013). Introductory econometrics: on models and data types in econometrics. Available from:http://www.uio.no/studier/emner/sv/oekonomi/ECON4150/v13/ undervisningsmateriale /econ3150_v12_note01.pdf.
Brammer, S. & Pavelin, S. 2008. Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment, 17(2): pp.120-136. https://doi.org/10.1002/bse.506
Central Bank of Nigeria (2020). Annual Reports and Accounts. Online, available from https://www.cbn.gov.ng/documents/annualreports.asp [Accessed 27 November 2021].
Dhakli, A. (2021). The impact of ownership structure on corporate social responsibility: the moderating role of financial performance. Society and Business Review, https://doi.org/10.1108/SBR-01-2021-0013
D'Hulster, K., (2009). The Leverage Ratio: A New Binding Limit on Banks. World Bank; International Finance Corporation. [Accessed 02 May, 2021].
Ekundayo, G., Jamani, N. J. & Odhigu, F. (2021). Environmental Disclosure Modelling in a Developing Economy: Does Corporate Governance Matter? A Double Hurdle Regression Approach. International Journal of Financial Research, 12(4). 111-124. https://doi.org/10.5430/ijfr.v12n4p111
Frynas, J. G. (2009). Corporate social responsibility in the oil and gas sector. Journal of World Energy Law & Business, 2(3), 178-195. https://doi.org/10.1093/jwelb/jwp012
Gray, R. H. and Kouhy, R. (1993). Accounting for the environment and sustainability in lesser developed countries: An exploratory note. Research in Third World Accounting, 2(), 387-399.
Hackston, D. & Milne, M. J. (1996). Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing & Accountability Journal, 9(1), 77-108. https://doi.org/10.1108/09513579610109987
Hassan, A. & Kouhy, R. (2015). From environmentalism to corporate environmental accountability in the Nigerian petroleum industry: Do green stakeholders' matter? International Journal of Energy Sector Management, 9(2), 204-226. https://doi.org/10.1108/IJESM-05-2014-0008
Hassan, A. (2012). Corporate Environmental Accountability in the Nigerian Oil and Gas Industry: The Case of Gas Flaring. PhD. Abertay University
Hicks, A. (1994). Introduction to pooling. In: T. Janoski and A. Hicks. eds. The comparative political economy of the welfare state. 1 ed. ed. USA: Cambridge University Press. https://doi.org/10.1017/CBO9781139174053.007
Hossain, M., Tan, L. M., & Adams, M. (1994). Voluntary disclosure in an emerging capital market: Some empirical evidence from companies listed on the Kuala Lumpur Stock Exchange. The International Journal of Accounting, 29, 334−351.
Im, K. S., M. H. Pesaran, & Y. Shin. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics 115: 53-74. https://doi.org/10.1016/S0304-4076(03)00092-7
Itaoka, K. (2012). Regression and interpretation: Low R squared! In: Social Research Network, 12 - 13 April 2012. Japan: Mizuho Information and Research Institute, pp.1-22.
Iyoha, A., & Osakwe, S. O. (2018). Ownership Structure and Environmental Disclosure Practices of Oil and Gas Companies in Nigeria. Federal University Otuoke Quarterly Journal of Contemporary Research, 1&2, 1-15.
Jenkins, H. & Yakovleva, N. (2006). Corporate social responsibility in the mining industry: Exploring trends in social and environmental disclosures. Journal of Cleaner Production, 14(), 271-284. https://doi.org/10.1016/j.jclepro.2004.10.004
Juhmani, O. (2014). Determinants of Corporate Social and Environmental Disclosure on Websites: The Case of Bahrain. Universal Journal of Accounting and Finance, 2(4), 77-87. https://doi.org/10.13189/ujaf.2014.020402
Kolsi, M. C. & Muqattash, R. (2020). Board Characteristics, Ownership Structure and Corporate Social Responsibility Disclosures: Evidence from ADX-Listed Companies. The IUP Journal of Corporate Governance, 19(2), 7-31, https://doi.org/10.1108/SRJ-02-2020-0041
KPMG (2020). The Time has Come. The KPMG Survey of Sustainability Reporting 2020. Online, available from https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/11/the-time-has-come.pdf [Retrieved 27 November 2021].
Lagasio, V. & Cucari, N. (2019). Corporate governance and environmental social governance disclosure: a meta-analytical review. Corporate Social Responsibility and Environmental Management, 26(4), 701-711. https://doi.org/10.1002/csr.1716
Leung, S. & Horwitz, B. (2004). Director ownership and voluntary segment disclosure: Hong Kong evidence. Journal of International Financial Management & Accounting. 2004, 15 (3), 235-260 https://doi.org/10.1111/j.1467-646X.2004.00109.x
McConnell, J.J. and Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2), 595-612. https://doi.org/10.1016/0304-405X(90)90069-C
Mohammed, S. D. (2016). Social and Environmental Disclosures: A Comparative Analysis of Listed Nigerian and UK Oil and Gas Companies. PhD Thesis, Abertay University Dundee, UK.
Mohammed, S. D., Adam, A. D., Muhammad, S. M., Gimba, Y. A. & Sulaiman, B. A. (2020). A Longitudinal Study of The Social and Environmental Accountability Practices of Listed Nigerian Oil and Gas Companies. International Journal of Advanced Research 8(4), 477-492. https://doi.org/10.21474/IJAR01/10800
Mohammed, S.D., Hassan, A. & Bala, A.J. (2020). The Determinants of Corporate Social and Environmental Disclosure in the Nigerian Oil and Gas Industry: An Empirical Investigation. International Journal of Auditing and Accounting Studies, 2(2), 129-153.
Moshud, N. M. (2020). The Impact of Profitability on Environmental Disclosure of Quoted Firms in Nigeria. The Eurasia Proceedings of Educational & Social Sciences (EPESS), 17, 39-49.
Nandi, S. & Gosh, S. K. (2012). Corporate governance attributes, firm characteristics and the level of corporate disclosure: Evidence from the Indian listed firms. Decision Science Letters, 2 (1), 45-58. https://doi.org/10.5267/j.dsl.2012.10.004
Nigerian National Petroleum Corporation (2014). IOC's divestment good for local players. Online, available from https://thenationonlineng.net/iocs-divestment-good-local-players/ [Accessed 27 November 2021].
North Central University Library (2020). What is a 'gap in the literature'? Retrieved 12/01/2021 from https://ncu.libguides.com/researchprocess/literaturegap
Obasi, S. (2013). Nigeria Loses N159trn as IOCs Divest. Online, available from https://www.vanguardngr.com/2013/07/nigeria-loses-n159trn-as-iocs-divest/ [Accessed 27 November 2021].
Oktafianti, D. & Rizki, A. (2020). Managerial ownership, firm size, financial performance, and corporate environmental disclosure. Revisita da Ciencias Humanasy Sociales 36(26), 225-244.
Oxford Leaners Dictionary (2021). Meaning of Vulnerability. Online, available from https://www.oxfordlearnersdictionaries.com/definition/english/vulnerability [Retrieved 29 November 2021].
Park, R. (1967). Efficient Estimation of a System of Regression Equations When Disturbances Are Both Serially and Contemporaneously Correlated. Journal of the American Statistical Association, 62(), 500-509. https://doi.org/10.1080/01621459.1967.10482923
Phoprachak, D., & Buntornwon, T. (2020). Influence of Firm Size on the Environmental Disclosure and Performance of the Listed Companies on the Stock Exchange of Thailand. In https://doi.org/10.1007/978-3-030-36970-5_9
Pirsch J, Gupta S, & Landreth-Grau, S. (2007). A Framework for Understanding Corporate Social Responsibility Programs as a Continuum: An Exploratory Study. Journal of Business Ethics, 70(2), 125-140. https://doi.org/10.1007/s10551-006-9100-y
Podestà, F. (2002). Recent developments in quantitative comparative methodology: The case of pooled time series crosssection analysis. Decision Support System, Elsevier. (SOC 3- 02): pp.1-44.
Poznanski, J., Sadownik, B. & Gannitsos, I. (2013). Financial Ratio Analysis: A guide to useful ratios for understanding your social enterprise's financial performance Demonstrating Value.
Robinson, K. A., Saldanha, I. J., & Mckoy, N. A. (2011). Development of a framework to identify research gaps from systematic reviews. Journal of Clinical Epidemiology, 64(12), 1325-1330. https://doi.org/10.1016/j.jclinepi.2011.06.009
Samaha, K. & Dahaway, K. (2011). An empirical analysis of corporate governance structure and voluntary disclosure in volatile capital market: The Egyptian Experiences International Journal of Accounting and Performance Evaluation, 7(1), 61- 93. https://doi.org/10.1504/IJAAPE.2011.037726
Shonhadji, N. (2018). Financial Performance to Environmental Disclosure with Environmental Performance as Moderation. International Journal of Research Science & Management, 5(8), 183-191.
Subramaniam, R. K., Samuel, S. D. & Mahenthiran, S. (2015). Liquidity Implication of Corporate Social Responsibility Disclosures: Malaysian Capital Market Evidence Journal of International Accounting and Research 15(1), 133-153. https://doi.org/10.2308/jiar-51204
Sulaiman, M., Abdullah, N. & Fatima, A. (2014). Determinants of environmental reporting quality in Malaysia. International Journal of Economics, Management and Accounting, 22(1), 63-90.
Suttipun, M. & Stanton, P. (2012). Determinants of Environmental Disclosure in Thai Corporate Annual Reports. International Journal of Accounting and Financial Reporting, 2(1), 99-115. https://doi.org/10.5296/ijafr.v2i1.1458
Tagesson, T., Blank, V., Broberg, P., & Collin, S. (2009). What Explains the Extent and Content of Social and Environmental Disclosures on Corporate Websites: A Study of Social and Environmental Reporting in Swedish Listed Corporations. Corporate Social Responsibility and Environmental Management, 16(6), 352-364. https://doi.org/10.1002/csr.194
Tulsian, M. (2014). Profitability Analysis (A comparative study of SAIL & TATA Steel). Journal of Economic and Finance. 3(2), 19-22. https://doi.org/10.9790/5933-03211922
Zarzeski, M. (1996). Spontaneous Harmonization Effect of Culture and Market Forces on Accounting Disclosure Practices. Accounting Horizons. 10(1), 18-37.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 UMYU Journal of Accounting and Finance Research
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
