An institutional theory perspective on non-financial reporting: The developing Baltic context. Issue 4 (3rd December 2018)

• Record Type: Journal Article
• Authors: Dagilienė, Lina; Nedzinskienė, Rūta
• Is Part Of: Journal of financial reporting & accounting. Volume 16:Issue 4(2018)
• Page Start: 490
• Page End: 521
• Publication Date: 2018-12-03
• Subjects: Neo-institutional theory -- Baltic states -- Institutional factors -- Non-financial reporting -- Sustainability disclosure; Finance -- Research -- Periodicals; Accounting -- Research -- Periodicals; 657.3
• DOI: 10.1108/JFRA-06-2016-0054
• Languages: English
• ISSNs: 1985-2517

Abstract

Abstract : Purpose: The paper aims to explore the impact of institutional factors on non-financial reporting in the Baltic countries. The vast majority of research in the scientific literature references practices of sustainable disclosures in developed countries with a focus on legal factors and their effect on corporate reporting. Meanwhile, there is a lack of in-depth empirical data for identifying correlations between institutional (mandatory, normative and company-specific) factors and non-financial reporting in developing countries. Design/methodology/approach: The theoretical framework of neo-institutional theory was applied to explore how the external environment affects practices of non-financial reporting in developing countries. The approach used in the paper is quantitative. Findings: The research results reveal that if companies are likely to disclose voluntarily one of non-economic aspects in their reports, they are also likely to disclose more about the other non-economic issues. However, no significant correlations were detected between the disclosure of voluntary (non-economic) and mandatory (economic) aspects. Mandatory factors promote both – economic and non-economic reporting – while normative and company-specific factors promote non-economic reporting more. Practical implications: The authors contribute to the foreign investors and practitioners by helping to better understand corporate non-financial reporting practices in post-communistic countries. Originality/value: The research adds to the growing body of research on non-financial reporting practices with particular reference to the developing Baltic context. This study also contributes to scientific literature by exploring the impact of different institutional factors to non-financial reporting in developing countries.