ĐẠI HỌC KINH TẾ THÀNH PHÓ HỎ CHÍ MINHBÁO CÁO TỐNG KẾT ĐÈ TÀI NGHIÊN cứu KHOA HỌC THAM GIA XÉT GIÁI THƯỞNG “NHÀ NGHIÊN CỨU TRẺ UEH” NĂM 2024 THE IMPACT OF BUSINESS CHARACTERISTICS, PERFO
OVERVIEW AND INTRODUCTION
Problem statement
Throughout history, various perspectives on economic development have emerged, with one view asserting that finite resources limit growth and threaten the global ecosystem This perspective advocates for strict limitations on resource consumption to preserve access for future generations Conversely, another view recognizes resource finiteness but posits that scarcity is relative, leading humans to innovate substitutes and improve efficiency This approach suggests that while economic development initially causes environmental degradation, it may eventually lead to improved environmental quality as consumption patterns shift and substitutes are found.
Achieving economic development while protecting the environment is a pressing challenge, and sustainable reporting (SR) offers a viable solution Many businesses in developed nations are now integrating social performance into their financial reports, reflecting a growing global trend This movement is supported by influential organizations like the United Nations and the European Union, as well as countries such as the USA, UK, and Germany.
In Vietnam, the significance of sustainability reporting (SR) is gaining recognition, as companies publish information in annual reports and on their websites to attract socially and environmentally responsible investments, thereby enhancing stakeholder trust The Ministry of Finance mandated the disclosure of SR-related information by listed companies to ensure completeness, accuracy, and timeliness, highlighting SR as a means to reduce information asymmetry and improve investor oversight However, in developing countries, small businesses often prioritize economic growth over social responsibility, facing certain limitations in their SR practices.
Goals aimed at enhancing the sustainable development of businesses in Vietnam are gradually becoming more concrete A notable example is the issuance of Circular
The Ministry of Finance issued Circular No 96/2020/TT-BTC on November 16, 2020, outlining information disclosure guidelines for the securities market in Vietnam This regulation requires public and listed companies to annually publish ESG reports that detail their greenhouse gas emissions, management of raw material sourcing, energy and water consumption, compliance with environmental protection laws, labor policies, community responsibilities, and activities related to the green capital market, as directed by the State Securities Commission.
Many Vietnamese businesses are increasingly adopting sustainable development practices by integrating ESG criteria into their strategies On July 18, 2022, the Ho Chi Minh City Stock Exchange identified 20 companies from the VN100 index, which includes the largest listed firms in Vietnam, based on comprehensive ESG evaluations—focusing on environmental, social, and governance aspects Notably, Vietnam Dairy Products Joint Stock Company (Vinamilk) has emerged as a leader in sustainable development, consistently ranking among the Top 10 sustainable businesses in Vietnam's manufacturing sector for six years.
The question arises whether empirical research, surveys, and evaluations between
The relationship between sustainability reporting (SR) and firm value (FV) is gaining attention in developing countries like Vietnam, where SR remains a relatively unexplored topic among businesses Following the Ministry of Finance's Circular 155 in 2015, which mandated securities market information disclosure, research interest in SR has increased However, most studies conducted in Vietnam, such as those by H T V H T V Fla et al (2019), Hoang et al (2018), and Trang & Yekini (2014), have primarily been exploratory or explanatory, with limited empirical investigation into the SR-FV relationship Additionally, previous research has faced constraints due to small sample sizes, short durations, and insufficient corporate disclosures at the time of the studies.
Research objectives
The concept of sustainability remains a topic of debate, with differing views on its definition One perspective sees sustainability as the stable development of a business over time, while another emphasizes the integration of environmental and social issues into business strategies This lack of consensus often leads to analyses that overlook critical aspects of sustainability, particularly the economic dimension Aras and Crowther (2009) propose a comprehensive model of business sustainability that encompasses four key aspects: Social Influence, which addresses the impact of social factors and stakeholder engagement; Environmental Impact, focusing on the effects of business operations on the environment; Organisational Culture, which examines relationships with internal stakeholders; and the Financial aspect, representing the business's income.
1.2.2 Information demand from sustainable development reports
Businesses increasingly disclose information on sustainable development to meet societal demands for corporate social responsibility (Frost et al., 2008) The 1970s saw significant societal changes driven by business activities, prompting companies to publish reports on their social impacts to inform stakeholders By the 1980s, environmental pollution gained prominence, leading to a shift towards environmental impact reports that communicated the effects of business operations on the environment These reports—whether focused on social impacts, environmental impacts, or sustainable development—highlight the link between a company's growth strategy and its dedication to sustainable global economic practices, underscoring the importance of addressing social and environmental issues for long-term stability Hahn and Kuhnen (2013) note that sustainable development reports and social responsibility reports share similar concepts.
1.2.3 Motivations for disclosing sustainable development reports
Kolk's study (2004) identifies key motivations for companies to disclose sustainable development reports, which include enhancing control over objectives, supporting environmental strategies, raising awareness of environmental issues, communicating with stakeholders, increasing transparency, improving standardization, obtaining operational licenses, and enhancing reputation and development opportunities Conversely, companies may choose not to disclose such reports due to uncertainty regarding the benefits of sharing this information.
Competitors often fail to disclose crucial information, leading to customer indifference towards environmental issues Companies with an established reputation for environmental protection face challenges in communicating effectively about their initiatives High costs of disclosure and the difficulty in collecting synchronized data across all business activities further complicate the situation, posing a potential risk to the company's reputation.
Sustainable development reports are mainly voluntary disclosures, allowing companies the flexibility to share information on their sustainability efforts These reports can be presented in various formats, either as standalone documents or integrated with other reports, such as environmental or social responsibility reports.
In the scope of this research, sustainable development reports are a form of reporting that analyses factors influencing the sustainable development of a business, including economic, environmental, and social impacts.
Research subject and scope of the study
This study explores how operational efficiency, the selection of auditing firms, and corporate characteristics impact the disclosure of sustainable development information, with a particular focus on the moderating effect of the leverage ratio.
Regarding the research questions, after thorough research, the study identified the following questions to clarify the research problem:
Firstly, how do the three variables including operational efficiency, auditing company choice and corporate characteristics relate to disclosure of sustainable development information?
It is essential to consider the leverage ratio as a moderating tool that impacts the relationship among operational efficiency, the choice of auditing firms, corporate characteristics, and the disclosure of sustainable development information.
Regarding the scope of research, including research space and time:
The research group analyzed performance factors and business characteristics using data from the Annual Reports and Financial Reports of companies listed on the HoSE and HNX stock exchanges.
In 2022, a study was conducted to assess how performance and corporate characteristics influence the disclosure of sustainable development information, with a specific focus on the moderating effect of the leverage ratio across 668 businesses.
Research methodology
This study uses quantitative research methods, with research subjects including all companies listed on the Ho Chi Minh City and Hanoi stock exchanges.
The sampling progresses according to the targeted sampling method and the data is used in the form of secondary data feed.
Then, use the SPSS 20 tool to build the model, evaluate its suitability, determine the hypotheses and the ability of the model to accurately determine the prediction.
Research contributions
This research presents a scholarly analysis of how firm characteristics, operational efficiency, and auditing firm selection influence the disclosure of sustainable development information, with leverage acting as a moderating factor It paves the way for future studies to investigate the connection between financial structure and sustainable reporting strategies.
This study builds upon and clarifies previous research findings, explicitly addressing key differences in results compared to earlier studies, especially in the context of the post-COVID-19 era.
In 2022, the focus is on the examination of sustainable development efforts in the post-COVID-19 era, emphasizing the importance of integrating with the global economy This period is particularly crucial as businesses navigate the economic shocks and fluctuations caused by the pandemic, highlighting the need for resilience and adaptation in their strategies.
The research addresses the complexity of leverage regulation, paving the way for deeper exploration of how financial factors influence sustainable reporting behaviours
By addressing the regulatory role of leverage, the study provides valuable recommendations for stakeholders seeking to promote more transparent and responsible corporate reporting environments, beneficial to sustainable development goals.
The choice of auditing firms is crucial in the disclosure process of sustainable development information, as they provide assurance services that enhance the reliability and credibility of sustainability reports The selected auditing firm directly influences the quality and rigor of the auditing process, ultimately affecting the trustworthiness of the information disclosed by companies Additionally, auditing firms often have specialized knowledge of sustainable reporting standards, playing a significant role in the development and improvement of industry-wide standards for disclosing sustainable development information.
The key characteristics of a business, including its market tenure and asset scale, significantly influence the sustainable development disclosure process A company's stability and credibility are reflected in its operational longevity and asset size, which enhance its capacity to gain the trust of stakeholders interested in financial reporting These positive traits create a strong foundation for meeting sustainability commitments.
This research enhances both academic knowledge and practical policymaking by delivering in-depth insights into the complex dynamics influencing sustainable development information disclosure practices in companies By examining the moderating effect of leverage ratio, the study offers valuable recommendations for stakeholders aiming to promote a more transparent and accountable corporate reporting environment that supports sustainable development goals.
Research structure
The structure of the research paper consists of five chapters:
Chapter 2: Literature review and hypothesis
Chapter 5: Conclusion and managerial implications
Chapter 1 of the document introduces the issue of sustainable economic development and how businesses, especially in Vietnam, are moving towards integrating sustainable reporting (SR) into their business strategies It begins with a discussion on different perspectives of economic development and sustainable approaches, emphasising that while some views underline the necessity to limit resource consumption, others focus on finding more efficient utilisation methods and alternatives This section also highlights the importance of sustainable reporting in attracting environmentally and socially responsible investments, as well as its increasing acceptance both globally and locally, with Vietnam serving as a specific example.
The latter section of the document outlines the research objectives, scope, and methodology, aiming to investigate how operational efficiency, the selection of auditing firms, and corporate characteristics influence the disclosure of sustainable development information, with a specific focus on the moderating effect of leverage ratio It highlights the significance of conducting quantitative research on firms listed on the Ho Chi Minh City and Hanoi stock exchanges, utilizing a targeted sampling approach and secondary data Ultimately, the research aims to enhance academic knowledge and inform practical policy-making by providing insights into the interplay between financial structure and sustainable reporting strategies, while offering recommendations for stakeholders to foster a more transparent and responsible corporate reporting environment.
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
The term "sustainable development" was first introduced in the 1980 "World Conservation Strategy" by the International Union for Conservation of Nature (IUCN) This strategy emphasizes the need to consider both renewable and non-renewable resource exploitation while balancing short-term and long-term action plans However, it primarily addresses the sustainability of natural resources and lacks a holistic perspective on sustainable development.
Sustainability information disclosure involves enterprises sharing details about their environmental, social, and humanitarian impacts alongside their financial data in annual reports Through sustainability reports, companies assess and communicate their performance in these areas, demonstrating their commitment to corporate responsibility These reports not only inform stakeholders but also attract potential investors and enhance business value Consequently, businesses are prioritizing the creation and disclosure of sustainability information, as transparency in this area is essential for fostering a fair competitive financial market.
Financial disclosure is essential for all businesses, but sustainability information distinguishes them in the market By revealing sustainable development practices, companies build trust with stakeholders, including customers, investors, and the government This transparency enables businesses to better identify risks and opportunities related to social and environmental factors in the long term Moreover, sustainability reporting is crucial for Vietnamese companies aiming to integrate into the global economy, as it fosters collaboration with stakeholders and enhances risk management As sustainable development reports gain popularity, they not only improve adaptability and competitiveness but also correlate with increased profitability Conversely, a lack of information on sustainability can result in missed opportunities for partnerships and investments, particularly from foreign investors focused on sustainable practices.
International research highlights the critical role of the Board of Directors in corporate governance, emphasizing that a strong board is essential for promoting development and mitigating risks Studies indicate that many corporate failures and financial scandals stem from ineffective boards, underscoring the need for competent governance While most research on corporate governance focuses on developed nations, there is a lack of comprehensive studies on board characteristics and financial outcomes in emerging markets Tan et al (2019) analyzed data from 400 listed firms in Southeast Asia from 2009 to 2015, revealing that an ineffective Board of Directors negatively impacts business performance Furthermore, the duality of board leadership can hinder efficiency by complicating independent management and control, thus exposing the drawbacks of excessive dualism within boards.
Financial success and board traits have been proven to positively correlate in multiple previous research The size of the Board of Directors, which ranges from 6 to
A study indicates that a Board of Directors comprising 9 members positively correlates with business performance Furthermore, when the Board expands to 12 members, a significant association emerges between the independence of the Board and enhanced business performance.
Pucheta-Martinez & Gallego-Alvarez (2020) found that board characteristics, including size, governance, and the presence of female directors, positively influence firm performance In contrast, Assenga et al (2018) reported no significant connection between board features such as independence, size, and foreign directors with financial performance However, Garcia-Ramos & Diaz (2021) demonstrated that a comprehensive analysis of board characteristics, including independence and size, is indeed linked to financial performance, based on data from 295 Southern European firms between 2001 and 2010.
Research by Arafat et al (2021) found that female directors did not significantly impact company profits in Turkey, although the presence of independent female directors correlated with increased profitability Additionally, Green and Homroy (2018) utilized OLS, FEM, and IV analysis on the 100 largest firms in Europe, revealing that women's presence on corporate boards positively affects company performance Overall, a company's financial success is influenced by multiple factors beyond gender representation.
Research on the relationship between board of directors and financial performance in Vietnam is limited Pham et al (2021) utilized fixed effects to analyze the Vietnamese stock market from 2015 to 2019 but found no significant impact of board characteristics on financial performance In contrast, Chu (2020) argued that board duality enhances financial performance in a study covering 2016 to 2018 However, the representativeness of such studies is often lacking, as they typically rely on low-tech methods, static analyses, and short timeframes.
Deciding whether to disclose information is a critical choice for businesses, as it can lead to both positive and negative outcomes Managers' decisions regarding information disclosure are informed by various theories that explain the implications of transparency in business practices.
The Agency Theory, developed by Jensen and Meckling in 1976, suggests that when both owners and company managers prioritize their own interests, managers may not always act in the best interests of shareholders This theory highlights the necessity for annual reports to be voluntarily provided to creditors and shareholders, as the separation of ownership and control can create conflicts of interest To address these issues, owners can implement suitable incentives for managers, which may involve incurring monitoring costs to curb undesirable managerial behavior.
In the corporate landscape, a critical challenge arises from the information asymmetry between managers and shareholders, with managers possessing superior information This disparity complicates owners' efforts to accurately evaluate the decisions made by management As a result, managers may take advantage of owners' limited oversight, prioritizing their personal interests over the company's well-being.
The Signalling Theory, introduced by Spence in 1973 and later applied by Ross in 1977, addresses the information asymmetry in the labor market and corporate disclosures This theory suggests that financial decisions made by companies act as signals from managers to investors, shaping the company's financial communication strategy Companies with positive operational results typically leverage financial information as a signaling mechanism to the market When seeking to mobilize capital, enhanced information disclosure can attract investor interest, facilitating easier capital raising As a result, managers can include sustainability information in financial reports, enabling stakeholders to accurately evaluate the company's operational performance.
The Legitimacy theory, as proposed by Suchman (1995), defines that
Legitimacy refers to the actions of an entity that align with societal standards, values, and beliefs According to legitimacy theory, businesses can only thrive if their perceived value aligns with these societal norms Therefore, companies must engage in practices that meet societal expectations to ensure their survival and success.
Sadia (2015) suggests that legitimacy is a genera] perception or assumption that an entity's actions are desired, appropriate, or fitting within social systems constructed from values and beliefs.
The legitimacy theory is essential for understanding corporate behavior regarding voluntary information disclosure on economic, social, and environmental matters The information organizations share reflects society's assessment of their activities, ensuring alignment with societal expectations.
A study by M Shamil et al (2014) investigates the impact of board characteristics on sustainability reporting in Sri Lanka, focusing on board size, dual leadership, and the presence of female directors The findings indicate that larger boards and those with dual leadership positively influence sustainability reporting, while the inclusion of female directors correlates negatively This research underscores the importance of board structures in promoting transparency and accountability in environmental practices It serves as a pioneering exploration of these dynamics in the Sri Lankan context, offering valuable insights for policymakers, corporate leaders, and researchers interested in governance and sustainability in developing economies.
RESEARCH METHODOLOGY
3.1 Data sources and collection method
As of the end of 2022, Vietnam's Stock Market featured a total of 751 listed enterprises, comprising 417 on the Ho Chi Minh City Stock Exchange (HoSE) and 334 on the Hanoi Stock Exchange (HNX) This study focuses on a sample of 668 enterprises with a reporting date of December 31, 2022, representing 88.9% of all listed entities Data from the remaining 83 enterprises could not be collected due to differing reporting dates.
Listed companies publish data on firm characteristics, operational performance, and sustainability information through financial statements, management reports, annual reports, and corporate sustainability reports We gather this data from the Fiinpro Platform and the VietstockFinance website As the data is secondary, its accuracy relies entirely on the precise disclosure by the businesses involved.
Numerous research papers utilize various scales to assess sustainability disclosure, with most developed countries relying on the GRI index In Vietnam, where a CRI is not available, the author opts for a nominal scale due to its advantages over alternative methods Sustainability reporting is defined as a binary variable, assigning a value of “1” to firms that publish a sustainability report and “0” to those that do not.
Large corporations often participate in various activities that have a profound impact on society Companies with large shareholder bases frequently voice concerns about the social initiatives of these firms Previous research indicates that firm size can be assessed using different metrics, with total assets or the logarithm of total assets being common measures (Mohamed Adnan et al., 2023; All & Atan).
In our research, we opted to utilize the logarithm of total assets as a key measurement, as it is the most commonly employed metric in studies related to stock market capitalization (Giannarakis, 2014; Prado-Lorenzo & Garcia-Sanchez, 2010) and sales (Ahmed Haji, 2013; Majeed et al., 2015).
To achieve long-term market stability, businesses must prioritize effective information management, as highlighted by various experts Researchers frequently analyze the time elapsed between a company's stock exchange listing and the year of their study to assess this relationship (Mohamed et al., 2014; Habbash & Habbash, 2016; Dienes & Velte, 2016).
According to research by Mohamed et al (2014), Hackston and Milne (1996), and Branco and Rodrigues (2008), industries are categorized as either sensitive or non-sensitive to environmental and sustainability concerns Firms engaged in activities that impact the environment are classified as belonging to the sensitive sector (1), while those whose primary activities are less affected are categorized as non-sensitive (0) Sensitive sectors identified include manufacturing, chemicals, construction, real estate, plantations, and energy, whereas non-sensitive sectors encompass financial services, hospitality, healthcare, information technology, trading, and other services In the context of Vietnam, we utilize a list of 23 environmentally sensitive sectors from the Department of Science and Technology and the Industry Classification Benchmark (1CB) Sensitive sectors include Industry, Pharmaceuticals, and Medical, while Materials and other services are deemed non-sensitive The 1CB, established by Dow Jones and FTSE in 2006, consists of ten major industry groups.
19 industry groups, 41 industries and 114 small sub-sectors.
3.2.2.4 Firm profitability in previous researches, profitability is often measured by ROA or ROE (Mohamed Adnan et al., 2023, Khan et al., 2012; All & Atan, 2013; Giannarakis, 2014) This characteristic is often included in the control element Some studies suggest that profitability has a positive impact on the level of sustainability disclosure (Haniffa & Cooke, 2005; Barako et al., 2006; Fauzi & al., 2007; Said et al., 2009; Khan, 2010; Giannarakis, 2014; Rahman & Ismail, 2016;) But there are also some researchers who prove that higher profitability has a negative impact on the level of sustainability disclosure (see Sanchez et al., 2011; Juhmani, 2013; Rusmanto et al., 2014; Hong et al., 2016).
Firm growth is a complex and dynamic process influenced by various economic, social, and cultural factors Scholars identify four distinct types of firm growth: organic growth, the creation of new firms, the concentration of existing firms through mergers and acquisitions, and growth driven by innovation and the diffusion of new products and processes This paper focuses on organic growth, specifically measuring it through the growth rate of revenue compared to the previous year.
The variable in question is assessed using a nominal scale, assigning a value of 1 if a company is audited by one of the Big Four auditing firms—PricewaterhouseCoopers, KPMG, Ernst and Young, or Deloitte—and a value of 0 otherwise The Big Four are globally recognized for their auditing, tax, corporate governance consulting, and risk management services (Barako et al., 2006; Barakat et al., 2015) Research by Nguyen Van Linh et al (2022) and Vo Van Cuong (2021) indicates that companies audited by the Big Four tend to exhibit higher levels of sustainability disclosure.
Leverage can be measured through various methods, primarily focusing on the ratios of overall debt to total assets, overall debt to total equity, and long-term debt to equity (Mohamed Adnan et al., 2023; Farhan et al., 2020) Among these, the ratio of overall debt to total assets is the most commonly utilized, which is why we have chosen this measurement for our analysis.
Variable Label Definition Predicted sign
Sustainability Disclosure SD Firm publishes a sustainability report = 1, otherwise 0
Firm Size FS Natural logarithm of aggregate assets
Firm Age FA Number of listed years + Mohamed el al
Sector Sector Non-sensitive sectors
ROA ROA Net incomc/Avcragc assets during the year
ROE ROE Net income/Average equity during the year
(Total revenue this year - Total sales last year)/Tolal sales last year.
Audit Firm Audit Audited by Big4 = 1, otherwise 0
Leverage LVR It is determined by overall debt to total assets (2 years average)
Binary logistic regression was chosen for analysis due to the presence of a binary dependent variable alongside a mix of continuous and categorical variables This approach allowed us to effectively test the proposed hypotheses and derive the regression model.
SD^aO + a/*FS + a2*FA + ô3*Sector + a4*ROA + a5*ROE + a6*Growth + a7*Audit
- aO, al to a 10: Intercept and parameters to be estimated
Chapter 3 outlines the research methodology, detailing the approach for collecting and analysing data on sustainability reporting among Vietnamese listed companies The study focuses on a significant portion of the market, covering 668 enterprises from both the Ho Chi Minh City and Hanoi Stock Exchanges, which represents 88.9% of all listed enterprises It utilises secondary data from financial statements, annual reports, and sustainability reports to assess firm characteristics, operational performance, and sustainability disclosure levels The methodology includes defining the dependent variable (sustainability reporting) as a binary outcome, where firms that publish a sustainability report are marked as "1" and those that do not as "O" Independent variables such as firm size, age, sector, profitability, growth, and the choice of audit firm are measured through various established methods, with firm size, for example, being determined by the logarithm of total assets The study also considers a moderating variable, leverage, to explore its impact on the relationship between firm characteristics and sustainability reporting This comprehensive methodological framework aims to provide insights into the factors influencing sustainability disclosure among Vietnamese listed companies.
RESEARCH RESULTS
Table 4.1: Descriptive statistics according to sample sustainable development information disclosure in 2022.
In 2022, the data reveals that the number of enterprises not disclosing sustainable development information was approximately 1.4 times greater than those that did, highlighting a significant gap in transparency This aligns with Vietnam's position at 55th globally regarding Sustainable Development Goals (SDGs) in the post-Covid context Nevertheless, the relatively high proportion of enterprises that are disclosing sustainable development information indicates a positive trend towards enhancing sustainability efforts in the country.
Table 4.2: Descriptive statistics by sensitive industry classification of the sample in 2022.
In 2022, the data in Table 4.2 reveals that the proportion of enterprises in non-sensitive industries was nearly equal to that in sensitive industries, with both categories showing a ratio close to 1.
Audit firm Frequency (business) Percentage (%)
Fable 4.3: Descriptive statistics by audit of the enterprises in 2022
In 2022, the data in Table 4.3 reveals that the proportion of enterprises audited by Non-Big firms was significantly higher, approximately 2.2 times greater than those audited by Big4 firms Notably, only 31.3% of enterprises chose Big4 auditors, highlighting the limited selection of these firms among listed enterprises during that year.
Table 4.4: Descriptive statistics by variables FS, FA, ROA, ROE, and Growth.
Variable N Minimum Maximum Mean Std Deviation
The analysis conducted using SPSS 20 revealed that the company scale variable (FS) ranged from 23.6175 to 35.2905, with an average of 28.04282, highlighting significant diversity in company sizes within the sample Additionally, the number of years companies have been listed on the stock exchange varied from 0 to 22 years, with an average of 10.91 years, indicating a broad range of experience among the firms Furthermore, the profitability and performance metrics, including ROA, ROE, and Growth, exhibited considerable variation, with ROA ranging from -0.3 to 0.6, ROE from -1 to 1, and Growth from -111.43564 to 20.06748103 This data reflects the differing operational efficiencies of companies in the post-Covid period, as some reported high profitability while others faced losses.
The authors conducted regression with the following equation:
SD = a0 +ô/*FS + a2*FA + d*Sector + a4*ROA + ô5*ROE + a6*Growth + a7*Audit
Where: aO, al to a 10: intercept and parameters to be estimated
FA = Firm Age Sector = Firm Sector ROA = Return on asset ROE = Return on equity Growth = Firm Growth Audit = Audit Firm
The Omnibus test results in Table 4.5 show that all significance values (Sig.) for the coefficients are 0.000, which is below the 0.05 threshold This indicates that the regression model is appropriate and demonstrates a statistically significant correlation between the independent and dependent variables, with a confidence level exceeding 95%.
4.2.2 Examination of the Coefficient -2 Log-Likelihood (-2LL)
Iteration History a b>c d Iteration -2 Log likelihood
Constant Sector FS FA ROA Audit ROE Growth
5 765.730 -9.344 -0.422 0.324 -0.035 4.346 1.006 -0.238 0.012 a Method: Enter b Constant is included in the model c Initial -2 Log Likelihood: 909.153 d Estimate terminated at iteration number 5 because parameter estimates changed by less than 001.
Model Summary Step -2 Log likelihood Cox and Snell R Square Nagelkerke R Square
1 765.730a 0.193 0.260 a Estimation terminated at iteration number 5 because parameter estimates changed by less than 0.001.
The Iteration History table shows that the Null Model has a -2 Log Likelihood value of 909.153, while the Proposed Model has a value of 765.730 This lower value indicates that the regression model is suitable and the results are favorable.
4.2.3 Assessment of the Model ’s Accuracy Prediction
Table 4.8: Results of testing the accuracy of the model ’s predictions.
The results indicate that the accuracy of the model's predictions is 71.1%, which is relatively high and acceptable.
Table 4.9: Results of Binary Logistic Regression.
The logistic regression analysis conducted using SPSS revealed that five variables significantly influence sustainable reporting disclosure (SD) Specifically, Sector, FS, ROA, and Audit all demonstrated a significance level of less than 0.05, indicating a strong impact at the 95% confidence level Furthermore, the variable FA, with a significance level of less than 0.01, also affects SD, albeit at a 90% confidence level In contrast, the variables ROE and Growth were found to have significance levels greater than 0.1 and were therefore excluded from the model.
The regression analysis reveals that the dependent variable SD is influenced by five independent variables: Sector, FS, FA, ROA, and Audit Notably, the values for Sector and FA are negative, suggesting they adversely affect SD In contrast, FS, ROA, and Audit demonstrate positive coefficients, indicating they enhance the dependent variable's performance.
Therefore, the regression equation for "sustainable development disclosure" is as follows:
Ln (p/(l-p)) = - 9,344 + 0,324*FS - 0,035*FA - 0,422*Sector + 4,346*ROA - 0,238*ROE + 0,012*Growth + l,006*Audit
4.3 Examination of the Moderating Role of Leverage Ratio
The authors multiplied the value of the Leverage variable by 7 independent variables to create 7 new variables, which were then included in the moderation model
The authors conducted regression analysis on this moderation model to examine the moderating role of the leverage ratio.
The results presented in Table 4.10 indicate that all significance coefficient values reached 0.000, which is below the 0.05 threshold, confirming the appropriateness of the regression model that includes the moderating variable This finding demonstrates a statistically significant correlation between the independent and dependent variables in the model, with a confidence level exceeding 95%.
4.3.2 Examination of the Coefficient -2 Log-Likelihood (-2LL)
Iteration History a b-t-d Iteration -2 Log likelihood
Constant Sector FS FA ROA Audit ROE Growth
6 755.959 -10.386 -0.060 -0.018 -0.016 19.641 0.124 -7.068 0.402 a Method: Enter b Constant is included in the model c Initial -2 Log Likelihood: 909.153 d Estimate terminated at iteration number 6 because parameter estimates changed by less than 001.
The Iteration History table reveals that the Null Model has a -2 Log-Likelihood (-2LL) value of 909.153, while the Proposed Model shows a significantly lower -2LL value of 755.959 This indicates that the regression model, which includes the moderating variable, is suitable and yields favorable regression results.
Model Summary Step -2 Log likelihood Cox and Snell R
1 755.959“ 0.205 0.276 a Estimation terminated at iteration number 5 because parameter estimates changed by less than 0,001.
4.3.3 Assessment of the Model ’s Accuracy Prediction
Table 4.13: Results of the Model ’s Accuracy Prediction Assessment
The model's accuracy prediction level, when incorporating the moderating variable, reaches 72.2%, showing a 1.1% improvement over the model that excludes this variable, which is considered relatively high and acceptable.
Table 4.14: Results of Binary Logistic Multivariate Regression.
Based on the results of the logistic regression analysis using SPSS, two variables,
The findings indicate that FS and Audit significantly influence sustainable development disclosure, as evidenced by their p-values being less than 0.05 at a 95% confidence level In contrast, other variables like Sector, FA, ROA, ROE, and Growth do not show a significant impact on this dependent variable.
> 0.05 and arc therefore excluded from the model in cases of leverage moderation The corresponding values for FS and Audit are 0.370 and 0.941, respectively.
The analysis of the leverage ratio's moderating effect reveals that the interaction term LVR*ROA is statistically significant (sig