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The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia

Objective: The primary objective of this study is to evaluate the impact of green accounting disclosure on the financial performance of publicly listed firms in Malaysia. Theoretical Framework: The theoretical framework of this study is based on Legitimacy Theory, which posits that firms engage in g...

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Main Authors: Rossazana, Ab Rahim, Daine Esther, Nero, Abdul Hayy Haziq, Mohamad, Mohd Waliuddin, Mohd Razali
Format: Article
Language:English
Published: Editora Alumni In 2025
Subjects:
HB Economic Theory
HG Finance
Online Access:http://ir.unimas.my/id/eprint/47695/1/wali_green.pdf
http://ir.unimas.my/id/eprint/47695/
https://sdgsreview.org/LifestyleJournal/article/view/5155
https://doi.org/10.47172/2965-730X.SDGsReview.v5.n03.pe05155
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spelling my.unimas.ir-476952025-03-04T00:31:58Z http://ir.unimas.my/id/eprint/47695/ The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia Rossazana, Ab Rahim Daine Esther, Nero Abdul Hayy Haziq, Mohamad Mohd Waliuddin, Mohd Razali HB Economic Theory HG Finance Objective: The primary objective of this study is to evaluate the impact of green accounting disclosure on the financial performance of publicly listed firms in Malaysia. Theoretical Framework: The theoretical framework of this study is based on Legitimacy Theory, which posits that firms engage in green accounting disclosures to align with societal expectations and enhance their legitimacy. Method: This study employs a panel data analysis method, utilizing both fixed effects and random effects models to assess the impact of green accounting disclosure (GAD) on the financial performance of publicly listed firms in Malaysia. The analysis covers data from 248firms across 13 sectors, spanning from 2019 to 2023, with key financial performance indicators including return on assets (ROA), return on equity (ROE), and return on sales (ROS), while controlling for firm size, stock performance, leverage, and board size. Results and Discussion: The results indicate that green accounting disclosure (GAD) has a significant negative relationship with return on assets (ROA), suggesting that while companies engage in green disclosures to enhance their legitimacy, it may incur costs that reduce short term profitability. However, GAD shows no significant impact on return on equity (ROE) and return on sales (ROS). The findings underscore that stock performance and leverage significantly influence the adoption of green disclosures, while firm size and board size were not significant factors. Research Implications: Policymakers and regulatory bodies should recognize that while green accounting disclosures improve corporate legitimacy, their direct impact on financial performance, particularly profitability, may be limited in the short term. Originality/Value: This study offers a unique perspective on the impact of sustainability reporting in a regulatory context, particularly within a developing market like Malaysia. Editora Alumni In 2025 Article PeerReviewed text en http://ir.unimas.my/id/eprint/47695/1/wali_green.pdf Rossazana, Ab Rahim and Daine Esther, Nero and Abdul Hayy Haziq, Mohamad and Mohd Waliuddin, Mohd Razali (2025) The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia. Journal of Lifestyle and SDGs Review, 5 (3). pp. 1-20. ISSN 2695-730X https://sdgsreview.org/LifestyleJournal/article/view/5155 https://doi.org/10.47172/2965-730X.SDGsReview.v5.n03.pe05155
institution Universiti Malaysia Sarawak
building Centre for Academic Information Services (CAIS)
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sarawak
content_source UNIMAS Institutional Repository
url_provider http://ir.unimas.my/
language English
topic HB Economic Theory
HG Finance
spellingShingle HB Economic Theory
HG Finance
Rossazana, Ab Rahim
Daine Esther, Nero
Abdul Hayy Haziq, Mohamad
Mohd Waliuddin, Mohd Razali
The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
description Objective: The primary objective of this study is to evaluate the impact of green accounting disclosure on the financial performance of publicly listed firms in Malaysia. Theoretical Framework: The theoretical framework of this study is based on Legitimacy Theory, which posits that firms engage in green accounting disclosures to align with societal expectations and enhance their legitimacy. Method: This study employs a panel data analysis method, utilizing both fixed effects and random effects models to assess the impact of green accounting disclosure (GAD) on the financial performance of publicly listed firms in Malaysia. The analysis covers data from 248firms across 13 sectors, spanning from 2019 to 2023, with key financial performance indicators including return on assets (ROA), return on equity (ROE), and return on sales (ROS), while controlling for firm size, stock performance, leverage, and board size. Results and Discussion: The results indicate that green accounting disclosure (GAD) has a significant negative relationship with return on assets (ROA), suggesting that while companies engage in green disclosures to enhance their legitimacy, it may incur costs that reduce short term profitability. However, GAD shows no significant impact on return on equity (ROE) and return on sales (ROS). The findings underscore that stock performance and leverage significantly influence the adoption of green disclosures, while firm size and board size were not significant factors. Research Implications: Policymakers and regulatory bodies should recognize that while green accounting disclosures improve corporate legitimacy, their direct impact on financial performance, particularly profitability, may be limited in the short term. Originality/Value: This study offers a unique perspective on the impact of sustainability reporting in a regulatory context, particularly within a developing market like Malaysia.
format Article
author Rossazana, Ab Rahim
Daine Esther, Nero
Abdul Hayy Haziq, Mohamad
Mohd Waliuddin, Mohd Razali
author_facet Rossazana, Ab Rahim
Daine Esther, Nero
Abdul Hayy Haziq, Mohamad
Mohd Waliuddin, Mohd Razali
author_sort Rossazana, Ab Rahim
title The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
title_short The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
title_full The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
title_fullStr The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
title_full_unstemmed The Impact of Green Accounting Disclosure on Financial Performance of Public Listed Firms in Malaysia
title_sort impact of green accounting disclosure on financial performance of public listed firms in malaysia
publisher Editora Alumni In
publishDate 2025
url http://ir.unimas.my/id/eprint/47695/1/wali_green.pdf
http://ir.unimas.my/id/eprint/47695/
https://sdgsreview.org/LifestyleJournal/article/view/5155
https://doi.org/10.47172/2965-730X.SDGsReview.v5.n03.pe05155
_version_ 1825817118464016384
score 13.244413

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