Impact of institutional and contingent factors on adopting environmental management accounting systems: the case of manufacturing companies in Libya

Abstract

Purpose

Environmental management accounting (EMA) has received increasing interest since 2000 and is now regarded as an effective tool to deal with environmental issues and the economic performance of companies and countries. This study aims to examine the impacts of institutional pressures on the adoption of EMA by manufacturing companies operating in Libya. The study examines how such adoption is impacted by four contingent factors, namely, company size, company age, environmental management system adoption and business type.

Design/methodology/approach

Data was collected from a sample of medium- and large-sized manufacturing companies operating in Libya by means of a questionnaire survey. Institutional pressure and contingency factors were tested against the level of EMA adoption via multiple regression analysis and moderator multiple regression.

Findings

The results indicate that the relationship between coercive pressures and EMA adoption varies as a function of company size. This result indicates that when companies face pressures, the way they respond depends on specific circumstances and characteristics of the company such as company size.

Originality/value

The key contribution of this study to the body of knowledge comes from being able to combine contingency and the new institutional sociology perspective of the institutional theory to create a complementary perspective. This was achieved by examining the moderating effect of the four contingent variables on the relationship between institutional pillars and EMA adoption in manufacturing companies in Libya.

Citation

Elhossade, S.S., Abdo, H. and Mas’ud, A. (2021), "Impact of institutional and contingent factors on adopting environmental management accounting systems: the case of manufacturing companies in Libya", Journal of Financial Reporting and Accounting, Vol. 19 No. 4, pp. 497-539. https://doi.org/10.1108/JFRA-08-2020-0224