Does foreign ownership affect corporate sustainability disclosure in Pakistan? A sequential mixed methods approach

Area of Science:

• Corporate Social Responsibility (CSR)
• Emerging Economies
• Financial Economics

Background:

• Corporate sustainability disclosure is crucial for stakeholder trust and regulatory compliance.
• Foreign ownership can influence corporate governance and disclosure practices.
• Pakistan's emerging economy context presents unique challenges and opportunities for sustainability reporting.

Purpose of the Study:

• To examine the impact of foreign ownership on corporate sustainability disclosure in Pakistan.
• To analyze the relationship between foreign ownership and the economic, social, and environmental components of sustainability disclosure.
• To investigate the moderating effects of firm size, growth, and financial leverage on this relationship.

Main Methods:

• Sequential mixed methods approach.
• Data collected from 2006-2018 for non-financial companies listed on the Pakistan Stock Exchange.
• Utilized firm annual reports and Global Reporting Initiatives (GRI) database for data extraction.

Main Results:

• Foreign ownership has a significant positive impact on total corporate sustainability disclosure (TCSRI).
• Foreign ownership positively influences economic, social, and environmental disclosure components individually.
• Firm size and growth are positively associated with TCSRI and foreign ownership, while financial leverage shows a negative relationship.

Conclusions:

• Foreign ownership enhances corporate sustainability governance and disclosure practices in Pakistan.
• High financial leverage negatively impacts firms' capacity for sustainability reporting.
• Policy recommendations include diversifying ownership and managing financial leverage to improve sustainability disclosures.