The impact of environmental costs dimensions on the financial performance of Iraqi industrial companies with the role of environmental disclosure as a mediator

Abbas Al-Waeli (), Zuriadah Ismail, Raad Hanoon and Azam Khalid
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Abbas Al-Waeli: Mazaya University College; University Pendidikan Sultan Idris
Zuriadah Ismail: University Pendidikan Sultan Idris
Raad Hanoon: Mazaya University College
Azam Khalid: University Pendidikan Sultan Idris

Eastern-European Journal of Enterprise Technologies, 2022, vol. 5, issue 13(119), 43-51

Abstract: This study aims to examine the impact of environmental costs dimensions on the financial performance of Iraqi industrial companies with the role of environmental disclosure as a mediator. The data was collected from annual reports of 25 selected companies of the Iraqi stock exchange and oil sector from 2014 to 2018. The results show that the average percentage of environmental disclosure in the industrial companies selected in this study was 20.0 % and the mean found was 20.2 %. The results also showed that environmental costs (contingent costs and external social costs) positively influence financial performance, while contingent costs, social costs, hidden costs, and Image & relationship costs show a positive influence on environmental disclosure. The findings revealed that environmental disclosure was positively significant in affecting financial performance. It was found that environmental disclosure fully mediated the relationship between environmental costs (hidden costs and Image & relationship costs) and financial performance. Environmental disclosure partially mediated the relationship between environmental costs (Contingent costs, and social costs) and financial performance. There is no mediation of environmental disclosure for the impact of Conventional costs on financial performance. It was also found that environmental disclosure mediated the impact of environmental costs (Conventional costs, Image & relationship costs, and External social costs) on financial performance. This indicates advantages for companies that produce less moderate environmental disclosure and enables them to gain investors’ confidence. This study's implications provide insights into the implementation of the measurement of environmental costs and environmental disclosure in Iraq.

Keywords: environmental costs; financial performance; environmental disclosure; Iraqi industrial companies (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:baq:jetart:v:5:y:2022:i:13:p:43-51

DOI: 10.15587/1729-4061.2022.262991

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