Augustine Donkor, Terri Trireksani and Hadrian Geri Djajadikerta
This study examines the role of integrated reporting (IR) and earnings management (EM) practices on the combined assurance model (CA) and the firms’ capital market liquidity…
Abstract
Purpose
This study examines the role of integrated reporting (IR) and earnings management (EM) practices on the combined assurance model (CA) and the firms’ capital market liquidity (FCML) performance nexus. Based on a moderated mediation analysis, it examines the channels through which CA quality influences FCML performance.
Design/methodology/approach
The study uses data from the top 100 firms on the Johannesburg Stock Exchange (JSE) based on market capitalisation, and a bootstrap moderated mediation model through Hayes Process Macro was adopted.
Findings
The findings show that although IR quality mediates the CA quality and FCML performance nexus, the mediation is conditional on firms’ practices of EM, implying that the value of CA through IR to capital market participants is more pronounced for firms engaged in high EM practices.
Practical implications
The findings emphasise the importance of the CA model in streamlining assurance processes, reducing assurance costs and enhancing the credibility of financial and sustainability reports, thereby improving capital market performance. Hence, it is a valuable assurance framework for International Financial Reporting Standards (IFRS) S1 and S2 compliance.
Originality/value
This study uniquely lines up the CA model, IR quality and EM practices to project the value relevance and channel(s) through which the effective communication of the CA model influences FCML performance.
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Augustine Donkor, Terri Trireksani and Hadrian Geri Djajadikerta
This study aims to evaluate the relationship between integrated reporting and management’s opportunistic behavior (i.e., accrual and real earnings management) and the moderating…
Abstract
Purpose
This study aims to evaluate the relationship between integrated reporting and management’s opportunistic behavior (i.e., accrual and real earnings management) and the moderating role of firm complexity.
Design/methodology/approach
Data of firms at the Johannesburg Stock Exchange were collected and analyzed. The Johannesburg Stock Exchange is currently the primary exchange that mandates the practice of integrated reporting. Regression estimation models and robustness tests were applied to the analysis.
Findings
This study concludes that integrated reporting quality reduces firms’ accrual and real earnings management practices. It further concludes that the significant negative effect of integrated reporting quality on firms’ earnings management practices is impeded by higher firm complexity.
Originality/value
This study enhances the literature on the behavioral effect of a combined financial and sustainability disclosure practice on both accrual and real earnings management, specifically targeting South Africa’s listed companies – the primary market currently mandates integrated reporting practice.
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Augustine Donkor, Kwadjo Appiagyei, Teddy Ossei Kwakye and Gabriel Korankye
This study aims to clarify the value of sustainable development goals (SDGs) commitment by examining the moderating role of firms’ commitment to SDGs on firms’ carbon emissions…
Abstract
Purpose
This study aims to clarify the value of sustainable development goals (SDGs) commitment by examining the moderating role of firms’ commitment to SDGs on firms’ carbon emissions (CE) and firm value (FV) nexus.
Design/methodology/approach
The study uses ordinary least squares and other robust estimations on data from 89 listed firms on the Johannesburg Stock Exchange (JSE) from 2013 to 2021.
Findings
Firms with high CE are associated with lower FV. However, firms’ commitment to SDGs moderates the relationship by averting the value-destroying tendencies of high carbon-emitting firms.
Practical implications
Firms should integrate SDGs into their core business strategy and governance frameworks to enhance their environmental performance and FV. As market participants on the JSE, they should also focus on the allocation of resources for SDGs and the management of CE.
Social implications
The findings provide a basis for governments and policymakers to promote firm-level commitment to SDGs to help reduce the harmful effects of CE on society and help achieve SDG targets.
Originality/value
The study adds a new dimension to the existing environmental performance and financial outcomes literature by clarifying the moderating value of firms’ commitment to SDGs in the CE and FV discourse.
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Kwadjo Appiagyei and Augustine Donkor
This study examines the effect of the environmental sensitivity of firms on the relationship between integrated reporting (IR) quality and sustainability performance. Prior…
Abstract
Purpose
This study examines the effect of the environmental sensitivity of firms on the relationship between integrated reporting (IR) quality and sustainability performance. Prior research works focus on the nexus between IR quality and sustainability performance with little attention to factors that moderate this relationship.
Design/methodology/approach
Ordinary least squares (OLS) and other robust estimations are employed to analyse the data of firms on the Johannesburg Stock Exchange (JSE).
Findings
This study finds a positive association between IR quality and sustainability performance. However, the strength of this relationship is found to be weaker among environmentally sensitive firms, thereby raising concerns that such firms may be reporting less sustainability information with the mandatory implementation of IR on the JSE.
Practical implications
The findings highlight the need for regulatory bodies to consider additional sustainability disclosure requirements for firms in environmentally sensitive industries.
Social implications
The findings should make regulatory bodies aware of the possible actions of environmentally sensitive firms in relation to sustainability information within a mandatory setting of IR.
Originality/value
The study extends the existing literature on IR and sustainability performance by considering the effect of firm environmental sensitivity as a moderating factor.
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Augustine Donkor, Hadrian Geri Djajadikerta, Saiyidi Mat Roni and Terri Trireksani
This study aims to examine the relationship between integrated reporting (IR) quality and corporate tax avoidance (CTA). IR is an emerging reporting mechanism, while CTA practices…
Abstract
Purpose
This study aims to examine the relationship between integrated reporting (IR) quality and corporate tax avoidance (CTA). IR is an emerging reporting mechanism, while CTA practices are considered a hindrance to inclusive and sustainable growth. The study also assesses the moderating role of firm complexity on the IR-CTA relationship. Additionally, this study also envisages that CTA practices are not static. Hence, it also analyses the IR-CTA relationship across different intensity levels of CTA practices. The study focusses on listed companies in South Africa, the only country that has mandated IR practice so far.
Design/methodology/approach
Ordinary least square and quantile regressions are used to analyse archival and content analysis data for firms listed on the Johannesburg Stock Exchange from 2011 to 2017.
Findings
This study finds that IR quality negatively associates firms CTA practices. It further concludes that although firms’ transparency level increases due to IR quality, firm complexity reduces the significant negative relationship between IR and CTA practices. The findings also indicate that the IR-CTA relationship is not constant but instead differs across the CTA quantiles. At aggressive levels of CTA, no relationship is established between IR quality and firms’ CTA practices.
Practical implications
The findings provide a useful and more detailed description of the relationship between information quality and CTA practice, focussing on IR, an emerging reporting mechanism that is considered innovative and transparent.
Social implications
Considering the IR-CTA relationship found in this study, IR quality implementation may indirectly contribute to attaining sustainable development goals by reducing CTA practices.
Originality/value
This study examines the relationship between reporting quality and firms’ CTA practices from the perspectives of an emerging reporting mechanism, with a focus on South Africa, the only country that has mandated IR practice. Furthermore, the distributional mean effects of IR quality on firms’ CTA practices explored in this study extend beyond the usual IR-CTA relationship.
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Richard Kwasi Bannor, Helena Oppong-Kyeremeh, Daniel Anthony Aguah and Samuel Kwabena Chaa Kyire
The paper aims to examine fall armyworm's (FAW) effect on Ghana's farming households' income and food security status.
Abstract
Purpose
The paper aims to examine fall armyworm's (FAW) effect on Ghana's farming households' income and food security status.
Design/methodology/approach
A sample of 225 farmers, including FAW-infested households and non-FAW-infested households, were interviewed. Gross margin (GM) analysis was used to estimate farmers' farm revenues, and the Household Food Insecurity Access Scores (HFIAS) was employed to measure the food security status of the households. The seemingly unrelated regression (SUR) was adopted to investigate the effect of FAW infestation on gross income and food security.
Findings
From the study, FAW attack is predominant during the vegetative stage of the maize plant. The empirical results revealed that FAW-infested farms incur loss, whereas non-FAW-infested farmers gained profit. Also, FAW-infested households were mildly food insecure, while non-FAW-infested households were food secured. The results of SUR analysis reveal that FAW infestation decreased farmers' income from maize production and rendered them food insecure.
Research limitations/implications
One limitation of this study is that it largely depended on a survey; however, future studies can combine both survey and experimental data from the farmers' fields during minor and major growing seasons of maize.
Originality/value
Given the negative consequences of FAW, studies have been conducted across Africa and globally. However, most of these studies concentrated on using geographic information system (GIS) and descriptive statistics without necessarily quantifying the effect of FAW on food security and the profit margins of farming households. Therefore, this study adds to the little literature on the effect of FAW on food security and GM from maize production, which has received less attention in Ghana to the authors' best knowledge.
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Waqas Mehmood, Arshian Sharif and Attia Aman-Ullah
The purpose of the present study is to test the effect of financial development and environmental degradation on the control of corruption.
Abstract
Purpose
The purpose of the present study is to test the effect of financial development and environmental degradation on the control of corruption.
Design/methodology/approach
This study used a dynamic approach known as system GMM to analyze annual data from 90 developed and developing countries over 24 years, from 1996 to 2020.
Findings
The present study shows a significantly negative relationship between financial development and control of corruption and a significantly positive relationship between environmental degradation and control of corruption. The result suggests that improvement in financial development may reduce control of corruption; however, reduction in environmental degradation may reduce control of corruption. The results are consistent across both developed and developing countries.
Practical implications
The study’s findings have significant implications for financial institutions, governmental policy departments and environmental regulatory agencies. The policy outcomes are closely linked to the economic prosperity of countries. In general, developing countries can implement strategies to promote financial development and environmental regulations, even though they may temporarily tolerate corrupt activities. Conversely, developed nations may have differing implications from developing countries.
Originality/value
This study is different from the past literature as none of the studies have been conducted previously focusing on developed and developing countries’ financial development, environmental degradation and control of corruption.