Title: SUSTAINABILITY PRACTICE AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN SELECTED COUNTRIES IN SUB-SAHARAN AFRICA
Authors:
Abayomi O. Asubiojo, Olayinka I. Oluwagbade and Olusola E. Igbekoyi
Abstract:
As the global incidence of environmental mismanagement escalated, the significance of sustainability concerns in corporate practices grew progressively pronounced. Despite the presence of favourable business conditions characterized by increased profitability, the improper utilization and exhaustion of air resources emerged as an alarming indicator that the sustainability of future economic expansion could be compromised. This study explored the relationship between sustainability practices and financial performance among listed manufacturing firms in selected Sub-Saharan African countries. The study employed ex-post facto and explanatory research designs. Descriptive statistics characterized each variable, while regression design assessed relationship magnitude and independent variables’ influence. Secondary sources provided data from audited annual and sustainability reports of 146 manufacturing companies publicly listed on stock exchanges in sub-Saharan African nations. Criterion sampling technique determined the sample size, including companies listed before 2011 and remaining listed without delisting, totaling 62 companies classified into material products, consumer goods, healthcare goods, and industrial sectors. The regression analysis revealed significant findings regarding the impact of different types of disclosure (social, economic, and environmental) on the return on assets (ROA, ROE, and EVA) of these firms across three models. Overall, sustainability practices were found to have a positive and statistically significant effect on the financial performance of the listed manufacturing firms in the region. The study’s findings underscore the importance of sustainability practices in enhancing the financial performance of manufacturing firms in Sub-Saharan Africa. This study recommends that manufacturing firms in Sub-Saharan Africa should prioritize the integration of sustainability practices into their operations to improve financial performance.
Keywords: Sustainability practices, Economic disclosure, Social disclosure, Environmental disclosure, Return on assets (ROA), Return on equity (ROE), Economic value added (EVA).
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