African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4131

Full Length Research Paper

Elucidative motives of social and environmental reporting in Ethiopian companies

Kasu Birbirsa Baje
  • Kasu Birbirsa Baje
  • Department of Accounting and Finance, College of Business and Economics, Wolkite University, Ethiopia.
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Kirubel Asgedew Yemenu
  • Kirubel Asgedew Yemenu
  • Department of Accounting and Finance, College of Business and Economics, Wolkite University, Ethiopia.
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Sitina Akmel Surur
  • Sitina Akmel Surur
  • Department of Accounting and Finance, College of Business and Economics, Wolkite University, Ethiopia.
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  •  Received: 28 October 2019
  •  Accepted: 14 January 2020
  •  Published: 31 January 2020

Abstract

Stakeholders’ conscious follow-up on companies’ operation pressured business organizations to be responsible for the society and environment. Companies social and environmental reporting is essential to ease this pressure. Despite its importance, there is no clear consensus on the motivation of companies for their reporting. Therefore, the aim of this study was to examine the motivational factors influencing social and environmental reporting from large tax payers in Ethiopia. An explanatory research design through quantitative research approach was employed by using both primary and secondary data source which was collected from 262 sampled firms in 2018. The regression result revealed that firm age, size, profitability, board size and industry sensitivity had a positive and significant influence on social and environmental reporting, whereas, leverage had a negative and significant impact on social and environmental reporting. This result implied that beyond the voluntary nature of Ethiopian companies’ social and environmental reporting, they have been using their reporting to legitimize their position in the society.

 

Key words: Agency theory, legitimacy theory, social and environmental reporting, stakeholder theory.