IMPACT OF ENVIRONMENTAL MANAGEMENT COST DISCLOSURE ON FIRM PERFORMANCE IN NIGERIA: EVIDENCE FROM OIL & GAS FIRMS
Keywords:
Waste Management Cost, Employee Health, Return on Assets, Safety Cost and Financial Performance.Abstract
This study examined the impact of environmental management cost disclosure on the financial performance of listed oil and gas firms in Nigeria, covering the period 2012–2023. Specifically, the study investigated the effect of health and safety cost (HSC) disclosure and firm size (FSZ) on return on assets (ROA). Secondary data were extracted from annual reports of selected firms, and the Panel Autoregressive Distributed Lag (ARDL) model was employed to estimate both the short-run and long-run relationships among the variables. Findings showed that HSC exerts a positive and highly significant long-run effect on ROA, indicating that sustained investments in safety systems and environmental protection enhance firm performance. However, the short-run effect of HSC was negative and significant, reflecting the immediate financial burdens associated with compliance and safety investments. Firm size demonstrated a positive and significant effect on ROA in the short run but a negative and significant effect in the long run, suggesting that while larger firms benefit from economies of scale initially, prolonged expansion can lead to inefficiencies that reduce profitability. The error-correction term was negative and significant, confirming long-run equilibrium among the variables. The study concludes that environmental management costs and firm size exert dynamic influences on firm performance and recommends stronger environmental disclosure practices, strategic safety investments, and improved efficiency measures for large firms.References
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