Importance of Sustainability Accounting in Measuring the Costs of Electric and Conventional Cars on Investment and Average per Capita Income in Jordan
Abstract
This study aims to investigate the impact of sustainability accounting, which includes environmental accounting, social accounting, and governance information, on investment costs and average per capita income in Jordan, focusing on comparing electric and conventional vehicles. The Jordanian car sector, where the research is being conducted, provides a crucial framework for understanding the financial effects of sustainable accounting practices. The top players in Jordan’s automotive sector and sustainability accounting field comprise the target demographic for this study. A standardized questionnaire was used to survey an initial sample of 500 individuals. The 373 responses were legitimate and included in the final study following a thorough data screening. Data processing and evaluation meticulously used partial least squares multigroup analysis (PLS-MGA). According to the results, conventional automobiles’ path coefficient—which measures how much sustainability accounting affects investment costs and average per capita income—was visibly worse than electric cars. This study provides important new information about the function of sustainability accounting in the automotive industry and how it affects conventional and electric cars differently. The findings have important implications for decision-makers in the public and private sectors, as well as for investors and other industry participants, supporting their attempts to link sustainability programs with economic performance.
Keywords: average per capita income, investment costs, Jordan, partial least squares multigroup analysis, sustainability accounting.
Full Text:
PDFReferences
AL NATOUR A.R., MEQBEL R., KAYED S., and ZAIDAN H. The role of sustainability reporting in reducing information asymmetry: the case of family-and non-family-controlled firms. Sustainability, 2022, 14(11), 6644.
AL-HIYARI A., ISMAIL A.I., KOLSI M.C., and KEHINDE O.H. Environmental, social and governance performance (ESG) and firm investment efficiency in emerging markets: the interaction effect of board cultural diversity. Corporate Governance: The International Journal of Business in Society, 2023, 23(3): 650-673.
ALODAT A.Y., AL AMOSH H., KHATIB S.F., and MANSOUR M. Audit committee chair effectiveness and firm performance: The mediating role of sustainability disclosure. Cogent Business and Management, 2023, 10(1), 2181156.
ALSAYEGH M. F., ABDUL RAHMAN R., and HOMAYOUN S. Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 2020, 12(9), 3910.
ASHOK B., KANNAN C., USMAN,K.M., VIGNESH R., DEEPAK C., RAMESH R., NARENDHRA T.M.V., and KAVITHA C. Transition to electric mobility in India: barriers exploration and pathways to powertrain shift through MCDM approach. Journal of the Institution of Engineers (India): Series C, 2022, 103: 1251-1277. https://link.springer.com/article/10.1007/s40032-022-00852-6
BAID V., and JAYARAMAN V. Amplifying and promoting the “S” in ESG investing: the case for social responsibility in supply chain financing. Managerial Finance, 2022, 48(8): 1279-1297.
BOLOGNESI E., and BURCHI A. The impact of the ESG disclosure on sell-side analysts’ target prices: The new era post Paris agreements. Research in International Business and Finance, 2023, 64, 101827.
BUALLAY A. Sustainability reporting in food industry: An innovative tool for enhancing financial performance. British Food Journal, 2022, 124(6): 1939-1958.
BUALLAY A. Toward sustainability reporting in the MENA region: the effects on sector's performance. Managerial Finance, 2022, 48(8): 1137-1155.
CHEN X., WEERATHUNGA P.R., NURUNNABI M., KULATHUNGA K.M.M.C.B., and SAMARATHUNGA W.H.M.S. Influences of behavioral intention to engage in environmental accounting practices for corporate sustainability: Managerial perspectives from a developing country. Sustainability, 2020, 12(13), 5266. https://doi.org/10.3390/su12135266
CICIRETTI R., DALÒ A., and FERR G. Dissecting the European ESG Premium vs. the US: Is It All About Non-Financial Reporting? In: Creating Value and Improving Financial Performance: Inclusive Finance and the ESG Premium. Springer International Publishing, Cham, 2023: 27-57.
CINCINELLI P., PELLINI E., and URGA G. Systemic risk in the Chinese financial system: A panel Granger causality analysis. International Review of Financial Analysis, 2022, 82, 102179.
DURA J., and SUHARSONO R. Application Green Accounting to Sustainable Development Improve Financial Performance Study in Green Industry. Accounting Journal, 2022, 26(2): 192-212.
DZOMONDA, O. Environmental sustainability commitment and access to finance by small and medium enterprises: The role of financial performance and corporate governance. Sustainability, 2022, 14(14), 8863.
FENG G.F., LONG H., WANG H.J., and CHANG C.P. Environmental, social and governance, corporate social responsibility, and stock returns: What are the short- and long-run relationships? Corporate Social Responsibility and Environmental Management, 2022, 29(5): 1884-1895.
GLAMBOSKY M., JORY S.R., and NGO T. Stock market response to the statement on the purpose of a corporation: A vindication of stakeholder theory. Corporate Governance: An International Review, 2023, Early view. Online version of record before inclusion in an issue. https://doi.org/10.1111/corg.12508
HAMAD S., LAI F.W., SHAD M.K., KHATIB S.F., and ALI S.E.A. Assessing the implementation of sustainable development goals: does integrated reporting matter? Sustainability Accounting, Management and Policy Journal, 2023, 14(1): 49-74.
HAMMOND P., OPOKU M.O., and KWAKWA P.A. Relationship among corporate reporting, corporate governance, going concern and investor confidence: Evidence from listed banks in sub Saharan Africa. Cogent Business and Management, 2022, 9(1), 2152157.
HAMROUNI A., KARAMAN A.S., KUZEY C., and UYAR A. Ethical environment, accountability, and sustainability reporting: What is the connection in the hospitality and tourism industry? Tourism Economics, 2023, 29(3): 664-695.
HELFAYA A., MORRIS R., and ABOUD A. Investigating the Factors That Determine the ESG Disclosure Practices in Europe. Sustainability, 2023, 15(6), 5508.
HOQUE M.E. Why company should adopt integrated reporting? International Journal of Economics and Financial Issues, 2017, 7(1): 241-248.
HSIAO P.C.K., DE VILLIERS C., HORNER C., and OOSTHUIZEN H. A review and synthesis of contemporary sustainability accounting research and the development of a research agenda. Accounting and Finance, 2022, 62(4): 4453-4483.
ILIEMENA R.O. Environmental accounting practices and corporate performance: Study of listed oil and gas companies in Nigeria. European Journal of Business and Management, 2020, 12(22): 58-70.
JANICKA M., and SAJNÓG A. The ESG Reporting of EU Public Companies. Does the Company’s Capitalisation Matter? Sustainability, 2022, 14(7), 4279.
KARIĆ N., MAIA A.S., TEODOROVIĆ A., ATANASOVA N., LANGERGRABER G., CRINI G., RIBEIRO A.R.L., and ĐOLIĆ M. Bio-waste valorisation: Agricultural wastes as biosorbents for removal of (in) organic pollutants in wastewater treatment. Chemical Engineering Journal Advances, 2022, 9, 100239.
KEUM D.D., and RYAN S. Strategic Upward Striving Toward $100 Million Revenue: Setting Goals to Attract External Attention. Organization Science, 2023. Published online in Articles in Advance. https://doi.org/10.1287/orsc.2021.15148
KHURRAM M.U., CHEN L., and ABEDIN M.Z. ESG Disclosure and Internal Pay Gap: Empirical Evidence from China. 2022. Available at SSRN: https://ssrn.com/abstract=4307511
KOLAWOLE F.L., and FESTUS A.F. Environmental Accounting Practices and Environmental Capacity for Sustainable Economy. IOSR Journal of Humanities and Social Science, 2022, 27(10-6): 12-24.
KULIŃSKA-SADŁOCHA E. Environmental regulations as a framework for environmental risk management in banks. In: Environmental Risk Modelling in Banking. 1st ed. Routledge, 2022: 23-49.
KUMAR A., GUPTA J., and DAS N. Revisiting the influence of corporate sustainability practices on corporate financial performance: An evidence from the global energy sector. Business Strategy and the Environment, 2022, 31(7): 3231-3253.
LI L., QIN K., and WU D. A hybrid Approach for the Assessment of Risk Spillover to ESG Investment in Financial Networks. Sustainability, 2023, 15(7), 6123.
LIOU R.S., TING P.H., and CHEN Y.Y. The cost of foreign ownership: Voluntary sustainability reporting and financial performance in an emerging economy. Cross Cultural and Strategic Management, 2023, 30(3). http://dx.doi.org/10.1108/CCSM-09-2021-0165
LIU P., ZHU B., YANG M., and CHU X. ESG and financial performance: A qualitative comparative analysis in China's new energy companies. Journal of Cleaner Production, 2022, 379, 134721.
LONGDEN T., BECK F.J., JOTZO F., ANDREWS R., and PRASAD M. ‘Clean’ hydrogen? – Comparing the emissions and costs of fossil fuel versus renewable electricity based hydrogen. Applied Energy, 2022, 306, 118145.
MATOLCSY G. The Appearance of Economic, Social, Financial and Environmental Sustainability Aspects in the Practices of the National Bank of Hungary. Public Finance Quarterly, 2022, 67(3): 315-334.
MIRALLES-QUIRÓS M.M., MIRALLES-QUIRÓS J.L., and VALENTE GONÇALVES L.M. The value relevance of environmental, social, and governance performance: The Brazilian case. Sustainability, 2018, 10(3), 574.
MOHAMED BUALLAY A., AL MARRI M., NASRALLAH N., HAMDAN A., BARONE E., and ZUREIGAT Q. Sustainability reporting in banking and financial services sector: a regional analysis. Journal of Sustainable Finance and Investment, 2023, 13(1): 776-801.
MOONEEAPEN O., ABHAYAWANSA S., and MAMODE KHAN N. The influence of the country governance environment on corporate environmental, social and governance (ESG) performance. Sustainability Accounting, Management and Policy Journal, 2022, 13(4): 953-985.
NEWELL R.G., PIZER W.A., and PREST B.C. The shadow price of capital: Accounting for capital displacement in benefit–cost analysis. Working Paper 23-07. Resources for the Future, 2023. https://www.nber.org/system/files/chapters/c14875/revisions/c14875.rev1.pdf
NICHOLLS J.A. Integrating financial, social and environmental accounting. Sustainability Accounting, Management and Policy Journal, 2020, 11(4): 745-769.
OYEWO B., TAWIAH V., and HUSSAIN S.T. Drivers of environmental and social sustainability accounting practices in Nigeria: a corporate governance perspective. Corporate Governance: The International Journal of Business in Society, 2023, 23(2): 397-421.
PFAJFAR G., SHOHAM A., MAŁECKA A., and ZALAZNIK M. Value of corporate social responsibility for multiple stakeholders and social impact–Relationship marketing perspective. Journal of Business Research, 2022, 143: 46-61.
RAHMAN M.M., and ISLAM M.E. The impact of green accounting on environmental performance: mediating effects of energy efficiency. Environmental Science and Pollution Research, 2023, 30(26): 69431-69452.
SANDBERG H., ALNOOR A., and TIBERIUS V. Environmental, social, and governance ratings and financial performance: Evidence from the European food industry. Business Strategy and the Environment, 2023, 32(4): 2471-2489.
SARKAR S. Performance Evaluation of ESG Funds in India – A Study. The Management Accountant Journal, 2022, 57(3): 40-47.
SCARPELLINI S. Social impacts of a circular business model: An approach from a sustainability accounting and reporting perspective. Corporate Social Responsibility and Environmental Management, 2022, 29(3): 646-656.
SELIM O. ESG and AI: the beauty and the beast of sustainable investing. In: Sustainable Investing. Routledge, 2020: 227-243.
SHAIKH I. Environmental, social, and governance (ESG) practice and firm performance: an international evidence. Journal of Business Economics and Management, 2022, 23(1): 218-237.
SHALHOOB H., and HUSSAINEY K. Environmental, social and governance (ESG) disclosure and the small and medium enterprises (SMEs) sustainability performance. Sustainability, 2022, 15(1), 200.
SHEKARIAN E., IJADI B., ZARE A., and MAJAVA J. Sustainable supply chain management: a comprehensive systematic review of industrial practices. Sustainability, 2022, 14(13), 7892.
SPIESS-KNAFL W., and SCHECK B. Impact investing. In: Impact Investing: Instruments, Mechanisms and Actors. Springer International Publishing, Cham, 2023: 51-71.
SUKMADILAGA C., WINARNINGSIH S., YUDIANTO I., LESTARI T.U., and GHANI E.K. Does Green Accounting Affect Firm Value? Evidence from ASEAN Countries. International Journal of Energy Economics and Policy, 2023, 13(2), 509.
SULTANA S., ZULKIFLI N., and ZAINAL D. Environmental, social and governance (ESG) and investment decision in Bangladesh. Sustainability, 2018, 10(6), 1831. https://doi.org/10.3390/su10061831
TAVANTI M. Developing Sustainability in Organizations: A Values-Based Approach (Sustainable Development Goals Series). 1st ed. Palgrave Macmillan, 2023: 171-218.
TAXMAN F.S., and CAUDY M.S. Risk tells us who, but not what or how: Empirical assessment of the complexity of criminogenic needs to inform correctional programming. Criminology and Public Policy, 2015, 14(1): 71-103.
TWINAMATSIKO E., and KUMAR D. Incorporating ESG in decision making for responsible and sustainable investments using machine learning. In: 2022 International Conference on Electronics and Renewable Systems (ICEARS), 2022: 1328-1334.
VAN DER ZAHN J.L.M. Sustainability reporting regime transition and the impact on intellectual capital reporting. Journal of Applied Accounting Research, 2023, 24(3): 544-582.
WEN H., HO K.C., GAO J., and YU L. The fundamental effects of ESG disclosure quality in boosting the growth of ESG investing. Journal of International Financial Markets, Institutions and Money, 2022, 81, 101655.
WONG L.C., SUKI N.M., SUKI N.M., KASIM M.A., and SONG B.L. Consumers’ Green smartphone practices concerned with power consumption optimisation. Cleaner and Responsible Consumption, 2023, 10, 100129. https://doi.org/10.1016/j.clrc.2023.100129
YU E.P.Y., TANDA A., LUU B.V., and CHAI D.H. Environmental transparency and investors' risk perception: Cross‐country evidence on multinational corporations' sustainability practices and cost of equity. Business Strategy and the Environment, 2021, 30(8): 3975-4000.
ZENG Y., HE K., ZHANG J., and LI P. Adoption and ex-post impacts of sustainable manure management practices on income and happiness: Evidence from swine breeding farmers in rural Hubei, China. Ecological Economics, 2023, 208, 107809.
ZHOU G., LIU L., and LUO S. Sustainable development, ESG performance and company market value: Mediating effect of financial performance. Business Strategy and the Environment, 2022, 31(7): 3371-3387. https://doi.org/10.1002/bse.3089
BEBBINGTON J., UNERMAN J., and O’DWYER B. Sustainability accounting and accountability. Routledge, Abingdon, 2014.
ADAMS C.A. The International Integrated Reporting Council: A call to action. Critical Perspectives on Accounting, 2015, 27: 23-28.
HAIR J.F., RISHER J.J., SARSTEDT M., and RINGLE C.M. When to use and how to report the results of PLS-SEM. European Business Review, 2019, 31(1): 2-24. https://doi.org/10.1108/EBR-11-2018-0203
HAIR, J.F. HULT G.T.M., RINGLE C.M., and SARSTEDT M. A primer on partial least squares structural equation modeling (PLS-SEM), 3 ed. Sage, Thousand Oaks, CA, 2022.
Refbacks
- There are currently no refbacks.
