Do Foreign Ownership and Economic Performance Influence Corporate Environmental Reporting Practices? An Empirical Analysis

Abstract

The aim of this study is to look into the potential effects of ownership structure, such as foreign ownership, and market-based economic performance, such as Tobin’s Q, on nonfinancial corporations’ environmental reporting practices in the context of India’s developing economy, using a sample size of 404 corporations listed in the National Stock Exchange (NSE) 500 index from 2010 to 2022. The relationship between research parameters has been ascertained through the application of the panel data analysis technique. The study reports that ownership structure, expressed in terms of foreign ownership, is creating a positive and significant impact, which ultimately encourages corporations to carry out environmental doings and disclosure practices. Besides, market-based economic performance, which is expressed in terms of Tobin’s Q, is also found to increase the ecological reporting practices of corporations. These results provide new insight to related parties and executives on how to enhance the corporations’ environmental reporting practices in order to bring advantage for the corporations and the investors by rational choices about the factors that influence reporting environmental-related information. Further, the rising trend of environmental reporting specifies that the organizations were disclosing environmental information to upsurge credibility and community trust, also during the critical pandemic period. As a result, the study suggests that regulators create suitable guidelines to encourage Indian corporations to report more ecologically.