CORPORATE ENVIRONMENTAL DISCLOSURE AND ECONOMIC PERFORMANCE OF COMPANIES IN THE LIBYAN MANUFACTURING SECTOR

Abstract

This paper examines the influence of Corporate Environmental Disclosure (CED) on economic performance in Libya. A representative group of the Libyan accounting community was surveyed to provide their views and perceptions of CED. The study was conducted on 8 largest companies operating in the manufacturing sector in Libya. A survey questionnaire was used to collect data. The results indicate that there is a significant influence of company's environmental disclosure on economic performance, suggesting that, the better the economic performance of a company, the greater its social responsibility. The paper is based on a small sample of manufacturing firms. However, findings will bring efficient contributions to the other studies dealing with the accounting harmonization. The majority of studies on CED are still embedded in the economic and organisational contexts of developed world. This research aims to address this gap by focusing on the CED framework of developing nations such as Libya.

Keywords

• Disclosure, Corporate environmental responsibility, Environmental disclosure, Manufacturing companies, Libya

References

1. Abreu, Nica, Castro Felipe, Soares Francisco and Filho Jos. (2012) “Comparative
2. Understanding of Corporate Social Responsibility of Textile Firms”, Journal of Cleaner Production, Vol, 20, No.1, pp.119-126. Ahmad, Nassr (2004) “Corporate Environmental Disclosure in Libya: Evidence and Environmental Determinism Theory”, PhD thesis, University of Napier, Edinburgh, UK.
3. Akbas, Halil, and Canikli Seda (2014) “Corporate Environmental Disclosures in a
4. Developing Country: An Investigation on Turkish Listed Companies”, International Journal of Economics and Finance, Vol. 6, No. 2, pp. 50-61. Aldrugi, Ali. (2013) “Environmental Disclosure in the Libyan Oil and Gas Sector”, PhD thesis, Nottingham Trent University, UK.
5. Al-Drugi, Ali. and Abdo Hafez. (2012) “Investigating the Development of Environmental
6. Disclosures by Oil and Gas Companies Operating in Libya: A Comparative Study”, International Journal of Economics and Finance Studies, Vol. 4, No. 2, pp. 1-12. Al-Tuwaijri, Sulaiman, Christensenb Theodore, Hughes, K. (2004) “The Relations among
7. Environmental Disclosure, Environmental Performance, and Economic Performance: a Simultaneous Equations Approach”, Accounting, Organisations and Society, Vol. 29, No. , pp. 447-471. Arevalo, Jorge, Aravind Deepa. (2011) “Corporate Social Responsibility Practices in India:
8. Approach, Drivers, and Barriers”, Corporate Governance, Vol. 11, No. 4, pp. 399-414. Arnold, Patricia and Hammond Theresa. (1994) “The Role of Accounting in Ideological

9. Conflict: Lessons from the South African Divestment Movement”, Accounting, Organisations and Society, Vol. 19, No. 2, pp. 111- 126. Bayoud, Nagib, Kavanagh Marie and Slaughter Geoff. (2012b) “Factors Influencing Levels of Corporate Social Responsibility Disclosure by Libyan Firms: A Mixed Study”,
10. International Journal of Economics and Finance, Vol. 4, No. 4 pp. 13-29. Bebbington, Jan, Gray Rob, Thomson Ian and Walters Diane. (1994) “Accountants’ attitudes and environmentally sensitive accounting”, Accounting and Business Research, Vol. 24, No. 94, pp. 109-20.
11. Central Bank of Libya. (2009), [online], Available from: www.cbl.gov.ly, Accessed, 2016.
12. Clarkson, Peter, Li Yue and Richardson Gordon. (2004) “The Market Valuation of
13. Environmental Capital Expenditures by Pulp and Paper Companies”, Accounting Review, Vol. 79, No. 2, pp. 329-353. Deegan, Craig and Gordon Ben. (1996) “A Study of The Environmental Disclosure
14. Practices of Australian Corporations”, Accounting and Business Research, Vol. 26, No. 3, pp. 187-199. Deegan, Craig and Rankin Michaela, (1996) “Do Australian Companies Report
15. Environmental News Objectively? An Analysis of Environmental Disclosures by Firms Prosecuted Successfully by the Environmental Protection Authority”, Accounting, Auditing and Accountability Journal, Vol. 9, No. 2, pp. 50-67. Deegan, Craig, Rankin Michaela and Tobin John. (2002) “An Examination of The Corporate Social And Environmental Disclosures of BHP from 1983-1997: A Test of
16. Legitimacy Theory”, Accounting, Auditing & Accountability Journal, Vol. 15, No. 3, pp. 343. Ditlev-Simonsen, Caroline, Midttun, Atle, (2011) “What Motivates Managers to Pursue
17. Corporate Responsibility? a Survey Among Key Stakeholders”, Corporate Social Responsibility and Environmental Management, Vol. 18, No. 1, pp. 25-38. Elmogla, Mahmoud, Cowton Christopher and Downs Yvonne. (2011) “Corporate Social
18. Reporting in a Transition Economy: The Case of Libya”, Financial Ethics and Governance Research Group, pp.1-36. Esa, Elinda and Ghazali, Nazli. (2012) “Corporate Social Responsibility and Corporate
19. Governance in Malaysian Government-Linked Companies”, Corporate Governance, Vol. , No. 3, pp. 292-305. Freedman, Martin and Jaggi Bikki. (1992) “An Investigation of the Long-Run Relationship between Pollution Performance and Economic Performance: the Case of Pulp and Paper
20. Firms”, Critical Perspectives on Accounting, Vol. 3, pp. 315-336. Freedman, Martin and Jaggi Bikki. (1994) “Analysis of the Association between Pollution
21. Performance and Input Cost Factors: The Case of Electric Utility Plants”, Journal of Accounting and Public Policy, Vol. 13, No. 1, pp. 31-48. Gao, Simon, Heravi Saeed and Xiao Jason. (2005) “Determinants of Corporate Social and Environmental Reporting in Hong Kong: A Research Note”, Accounting Forum, Vol. , No. 2, pp. 233-242.
22. Gerbens-Leenes P. W., Moll, H.C and Uiterkamp, AIM. (2003) “Design and Development of a Measuring Method for Environmental Sustainability in Food Production Systems”,
23. Ecological Economics, Vol. 46, pp. 231-248. Gibby, Daniel and Patella Ronald. (1993) “Deductibility of Environmental Remediation
24. Costs”, Journal of Accountancy, Vol. 176, No. 6, pp. 44-49. Hackston, David and Milne Markus. (1996) “Some Determinants of Social and Environmental Disclosure in New Zealand Companies”, Accounting Auditing and Accountability Journal, Vol. 9, No. 1, pp. 77-108.
25. Hokoma, Rajab, Khan Mohammed and Hussain Khalid (2008) “Investigation into the Implementation Stages of Manufacturing and Quality Techniques and Philosophies within the Libyan Cement Industry”, Journal of Manufacturing Technology Management, Vol. 19, No. 7, pp. 893-907.
26. Hu, Yuan and Karbhari Yusuf. (2015) “Incentives and Disincentives of Corporate
27. Environmental Disclosure: Evidence from Listed Companies in China and Malaysia”, Thunderbird International Business Review, Vol. 57, No. 2, pp. 143-161. Ince, Davut. (1998) “Corporate Social and Environmental Reporting (CSER): An
28. Application of Stakeholder Theory”, PhD, University of Exeter. Institute of Chartered Accountants in England and Wales (ICAEW) (1992) “Business
29. Accountancy and the Environment: A Policy and Research Agenda”, ICAEW, London. Islam, Shafiqul., Hosen, Aoulad and Islam, Mujahidul. (2005) “An Examination of
30. Corporate Environmental Disclosure by the Bangladeshi Public Limited Companies”, Journal of Social Sciences, Vol. 3, No. 9, pp. 1095-1102.
31. Kuasirikun, Nongnooch. (2005) “Attitudes to the Development and Implementation of
32. Social and Environmental Accounting in Thailand”, Critical Perspectives on Accounting, Vol. 16, pp. 1035–1057.
33. Liu, Xianbing and Anbumozhi, V. (2009) “Determinant Factors of Corporate
34. Environmental Information Disclosure: an Empirical Study of Chinese Listed Companies”, Journal of Cleaner Production, Vol. 17, No. 6, pp. 593-600. Marston, Claire and Shrives, Philip., (1991) “The Use of Disclosure Indices in Accounting
35. Research: A Review Article”, British Accounting Review, Vol. 23, No. 3, pp. 195-210. Narwal, Mahabir and Sharma Tejinder (2008) “Perceptions of Corporate Social
36. Responsibility in India: an empirical study”, Journal of Knowledge Globalization, Vol. 1, No. 1, pp. 61-79. Pahuja, Shuchi (2009) “Relationship between Environmental Disclosures and Corporate
37. Characteristics: a Study of Large Manufacturing Companies in India”, Social Responsibility Journal, Vol. 5, No. 2, pp. 227-244. Patelli, Lorenzo and Prencipe Annalisa., (2007) “The Relationship between Voluntary
38. Disclosure and Independent Directors in the Presence of a Dominant Shareholder”, European Accounting Review, Vol. 16, No. 1, pp. 5-33. Pratten, John and Mashat Adel. (2009) “Corporate Social Disclosure in Libya”, Social
39. Responsibility Journal, Vol. 5, No. 3, pp. 311-327. Radebauh, L. H. and Gray, S. J. (2002) “International Accounting and Multinational
40. Enterprises”, New York: John Wiley and Sons Inc. Rao, Kathyayini, Tilt Carol and Lester Laurence. (2012) “Corporate Governance and Environmental Reporting: an Australian Study”, Corporate Governance, Vol. 12, No. 2, pp. 143-163.
41. Roberts, Robin. (1992) “Determinants of Corporate Social Responsibility Disclosure: An
42. Application of Stakeholder Theory”, Accounting, Organisations and Society, Vol. 17, No. , pp. 595-612. Tilt, Carol and Symes Christopher. (1999) “Environmental Disclosure By Australian
43. Mining Companies: Environmental Conscience Or Commercial Reality? ”, Accounting Forum, Vol. 23, No. 2, pp. 137-154. U.S. Energy Information Administration (2014) “Country Analysis Brief: Libya”, [online],
44. Available from: http://www.eia.gov/ countries /analysisbriefs/Libya/libya.pdf, Accessed, Ullmann, Arieh. (1985) “Data in Search for a Theory: A Critical Examination of the Relationship among Social Performance, Social Disclosure, and Economic Performance”,
45. Academy of Management Review, Vol. 10, No. 3, pp. 540-577. Williams, Mitchell. (1999) “Voluntary Environmental and Social Accounting Disclosure
46. Practices in the Asia Pacific Region: An International Empirical Test of Political Economy Theory”, The International Journal of, Accounting, Vol. 34, No. 2, pp. 209-238.