The Impact of Corporate Social and Environmental Disclosure on Financial Performance: Empirical Evidence from South Africa and Morocco

• In Event: Culture and Accounting

Abstract

The aim of this study is to investigate the relationship between corporate performance and social and environmental disclosure for two African leading countries namely, South Africa (common law country) and Morocco (civil law country). Our sample consists of 168 annual reports spanning from 2004 to 2009. A content analysis of companies’ annual reports is used to measure the extent of voluntary social and environmental disclosure. Results show that social and environmental disclosure has a significant positive effect on corporate performance only in the South African setting. The findings emphasize the need to explicitly consider the legal and institutional setting prevailing in each context. For instance, social and environmental organisations in South Africa enjoy more power to influence companies’ social and environmental reporting policy, whereas, their counterparts in Morocco, enjoy less power to place pressure on companies to incorporate social and environmental considerations into business operations.

Author

• Mohsen Souissi, Fayetteville State University