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This study examines the impact of financing decisions and ownership structure on green accounting disclosure (GAD) in developing economies, where sustainability practices have not been extensively integrated into business models. We conducted empirical analysis considering 172 manufacturing companies from 2001 to 2022, utilizing both fixed effect and random effect estimation techniques. The findings revealed that firms that rely primarily on debt financing tend to have an inverse relationship with the levels of green accounting disclosure. However, firms that depend mainly on equity financing tend to have higher levels of green accounting disclosure. In addition, the results of the estimation analysis showed a favorable association between ownership concentration and disclosure of green accounting practices. The findings suggest that policymakers should consider incentivizing firms to prioritize equity financing over debt financing to promote higher levels of green accounting disclosure. Additionally, policies should aim at encouraging ownership concentration within firms to enhance the transparency and accountability of environmental reporting practices, ultimately advancing the achievement of Sustainable Development Goals 12 and 13.
Chang et al. (Thu,) studied this question.