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Article
Publication date: 27 May 2020

Christelle Smith and Elmar R. Venter

This paper aims to investigate financial statement comparability in the extractive industry. This paper focuses on the extractive industry because International Financial…

Abstract

Purpose

This paper aims to investigate financial statement comparability in the extractive industry. This paper focuses on the extractive industry because International Financial Reporting Standards (IFRS) contain limited guidance on the accounting treatment for exploration and evaluation (E&E) costs and IFRS 6 – Exploration for and Evaluation of Mineral Resources allowed firms to continue with existing divergent accounting treatment of E&E costs.

Design/methodology/approach

The authors use data from Australia, a country that adopted IFRS in 2005 with a large extractive industry. They also compare changes in cross-country comparability around the IFRS adoption date between Australian firms and adopters relative to Australian firms and non-adopters to better isolate changes in comparability that are attributable to the adoption of IFRS from other sources that are not related to the adoption of IFRS. The authors measure comparability consistent with De Franco et al. (2011) where financial statements are comparable when two firms produce similar accounting amounts for similar economic events.

Findings

For non-extractive industry firms, the authors find the comparability of financial statements of Australian firms increased with other adopters and that this increase was relatively greater than the increase with non-adopter firms. This evidence is consistent with comparability benefits associated with the adoption of IFRS. However, for extractive industry firms, the authors do not find a significantly greater increase in the comparability of financial statements of Australian firms with adopters relative to the increase with non-adopters, suggesting that the increase is likely not associated with the adoption of IFRS. In additional analysis, they find that following IFRS adoption non-extractive Australian firms have greater within-country comparability relative to extractive Australian firms, while there was no difference in the pre-adoption period.

Originality/value

The evidence suggests that the divergent practices for E&E costs under IFRS 6 and the lack of an accounting standard that deals with matters relating to the extractive industry hinder the comparability of financial statements in this industry.

Details

Accounting Research Journal, vol. 33 no. 3
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 6 June 2008

Peter J. Buckley

The purpose of this paper is to examine the extent to which we require a special theory of foreign direct investment (FDI) for extractive industries.

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Abstract

Purpose

The purpose of this paper is to examine the extent to which we require a special theory of foreign direct investment (FDI) for extractive industries.

Design/methodology/approach

The paper examines the general theory of FDI using internalising theory and location theory and augments this by using special features that apply to the extractive industries including the obsolescing bargaining argument.

Findings

The paper shows that a special theory is clearly required to explain the particular circumstances of extractive industries. However, the received theory relying on internalisation and location elements performs well.

Practical implications

Despite the current issues around extractive industries and its peculiarities, analysis of the reasons for FDI (including Chinese FDI) remains explicable by standard theory.

Originality/value

FDI in the extractive industry provides a good test of the general theory of FDI and a special theory nested within this gives a great deal of insight into current issues of FDI in extractive industries.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 1 no. 2
Type: Research Article
ISSN: 1754-4408

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Book part
Publication date: 30 July 2020

Nicolien van Luijk, Audrey R. Giles and Lyndsay M. C. Hayhurst

To critically consider the role that environmental sustainability plays in Sport for Development and Peace's (SDP) conceptualization of development in Indigenous…

Abstract

To critically consider the role that environmental sustainability plays in Sport for Development and Peace's (SDP) conceptualization of development in Indigenous communities in Canada. To do this, the chapter presents a critical analysis of one of the most prominent SDP organizations in Canada, Right To Play (RTP), and its relationship with extractives companies that support RTP initiatives.

In the first part of the chapter, we discuss the role of environmental sustainability in SDP approaches around the globe. In the second part, a textual analysis of RTP's documents is conducted to consider how environmental sustainability plays a role in its promotion of development in Indigenous communities throughout Canada.

Key findings of the research are presented and critically analyzed. The textual analysis of RTP documents shows that there is currently little consideration of environmental sustainability in the promotion and description of RTP's programs that operate in Indigenous communities in Canada. In addition, RTP's connections to extractives companies raise questions about the potential future directions.

The limitations of a textual analysis approach are discussed and the need for future research in this area is outlined with specific reference to how SDP programs might promote environmental sustainability.

Details

Sport and the Environment
Type: Book
ISBN: 978-1-78769-029-5

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Article
Publication date: 9 February 2021

Stuart Mcchlery and Khaled Hussainey

This paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical…

Abstract

Purpose

This paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical evidence regarding voluntary and mandatory disclosure behaviour from both a quantitative and qualitative perspective.

Design/methodology/approach

A longitudinal empirical study examines probabilistic reserve quantum reporting of UK companies, over a time-period spanning voluntary and mandatory disclosure. The researchers analyse disclosure behaviour under voluntary and mandatory time spans using a logistical regression approach to measure determinants of risk reporting. Form of regulation is considered as the fundamental driver for disclosure whilst controlling for other relevant variables. Implications for developing international regulation are presented with suggestions for further research.

Findings

Mandatory reporting is not seen as a significant influence to disclosure. Degree of risk, quality of audit firms, level of stock exchange and organisational visibility each impact on disclosure. The findings indicate that a mandatory disclosure approach is ineffective, partially explained by mimetic and normative forces and a balancing of agency-related costs and benefits. There is an inverse relationship between level of risk and risk reporting.

Research limitations/implications

Generalisation of the findings is limited due to the specific context of the extractive industry.

Practical implications

The paper seeks to inform the International Accounting Standards Board's (IASB) on-going consideration of risk reporting and also its extractive industries deliberations.

Originality/value

The paper provides original insight into the area of risk management with particular focus on risk specificity and quantitative metrics for risk profiling not previously tested. The paper introduces risk profiling as a variable in risk disclosure.

Details

Journal of Applied Accounting Research, vol. 22 no. 3
Type: Research Article
ISSN: 0967-5426

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Content available
Article
Publication date: 10 May 2021

Olusola Joshua Olujobi

This study aims to investigate why anti-corruption statutes are not efficient in Nigeria’s upstream petroleum industry.

Abstract

Purpose

This study aims to investigate why anti-corruption statutes are not efficient in Nigeria’s upstream petroleum industry.

Design/methodology/approach

This study is a doctrinal legal research that embraces a point-by-point comparative methodology with a library research technique.

Findings

This study reveals that corruption strives on feeble implementation of anti-corruption legal regime and the absence of political will in offering efficient regulatory intervention. Finally, this study finds that anti-corruption organisations in Nigeria are not efficient due to non-existence of the Federal Government’s political will to fight corruption, insufficient funds and absence of stringent implementation of the anti-corruption legal regime in the country.

Research limitations/implications

Investigations reveal during this study that Nigerian National Petroleum Corporation (NNPC) operations are characterised with poor record-keeping, lack of accountability as well as secrecy in the award of oil contracts, oil licence, leases and other financial transactions due to non-disclosure or confidentiality clauses contained in most of these contracts. Also, an arbitration proceeding limit access to their records and some of these agreements under contentions. This has also limited the success of this research work and generalising its findings.

Practical implications

This study recommends, among other reforms, soft law technique and stringent execution of anti-corruption statutes. This study also recommends increment in financial appropriation to Nigeria’s anti-corruption institutions, taking into consideration the finding that a meagre budget is a drawback.

Social implications

This study reveals that corruption strives on feeble implementation of anti-corruption legal regime and the absence of political will in offering efficient regulatory intervention. Corruption flourishes due to poor enforcement of anti-corruption laws and the absence of political will in offering efficient regulatory intervention by the government.

Originality/value

The study advocates the need for enhancement of anti-corruption agencies' budgets taking into consideration the finding that meagres budgets are challenge of the agencies.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

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Article
Publication date: 5 May 2021

Constâncio A. Machanguana and Idalina Dias Sardinha

This paper aims to contribute to the scientific and societal debates about the role of corporate social responsibility (CSR) and particularly on the resettlements…

Abstract

Purpose

This paper aims to contribute to the scientific and societal debates about the role of corporate social responsibility (CSR) and particularly on the resettlements’ processes as part of extractive multinational companies (MNCs)’s commitments where the host country is an emerging extractive economy.

Design/methodology/approach

It is an exploratory study based on the analysis of secondary data, few interviews and on-site observation and deals with the description of the assessment of VALE, SA resettlement processes and assumed CSR practices of VALE, SA, an MNC operating in the Moatize district, Tete province in Mozambique.

Findings

The MNC assumes resettlement processes to be part of the CSR arena and reveals that VALE, SA follows a reactive poor approach as to CSR. The weak institutional context in Mozambique is like others described in the literature. The empirical data together with the sense of an ethical responsibility approach associated with resettlement processes and the paradigm shift in aid for trade as to development supported by the MNC’s CSR leads to the conclusion that resettlement can be considered part of the CSR of a mining MNC.

Research limitations/implications

The difficult access to key informants of the resettled communities, local government and little interest in interview participation by VALE, SA, showed a current lack of confidence and communication limitations by the company as to this issue.

Practical implications

The failure of VALE, SA and other mining companies to meet their resettlement responsibilities and the inability of government supervision, requires local and national, as well as social and scientific communication processes and debate on this issue to be maintained on an ongoing basis during the mining life cycle to guaranty accomplishments of CSR.

Social implications

The controversy over whether mining MNCs will benefit Africa’s emerging economies as to their socio-economic development will continue until MNCs commit themselves and act to be economically, legally and ethically responsible for contributing to the sustainable development of the countries where they operate.

Originality/value

This paper contributes to the debate on whether CSR frames the resettlement process based on literature review and key stakeholder views.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

Content available
Article
Publication date: 12 August 2019

Eva Liljeblom, Benjamin Maury and Alexander Hörhammer

State ownership has been common especially in industries with restricted competition. In Russia, state-controlled firms represent around 41 percent of the market value of…

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2821

Abstract

Purpose

State ownership has been common especially in industries with restricted competition. In Russia, state-controlled firms represent around 41 percent of the market value of all listed firms (Deloitte, 2015). Yet, there is a significant gap in the literature regarding the effects of various forms of government control in listed firms. The purpose of this paper is to fill this gap by exploring the impact of the complexity of state ownership and competition on the performance of Russian listed firms.

Design/methodology/approach

The sample consists of data for 72 firms (360 firm-years) in the Russian MOEX broad market index during 2011–2015. The complexity of state ownership is captured by studying forms of state control including majority/minority, direct/indirect, federal/regional, mixed structures and golden shares.

Findings

The authors find significant differences in performance relating to different forms of state ownership. State control is negatively related to firm valuation and the sales/employees ratio. Performance is weakest when state ownership takes the form minority, regional or direct ownership. State control through golden shares typically outperforms other state-controlled firms. The authors find indications of employment prioritization beyond the economical optimum. In addition, the relation between state ownership and profitability becomes positive in sectors where state firms appear to enjoy lower competition.

Originality/value

While the effects of state ownership have been studied on many markets, there is a lack of studies on the effects of different forms, or the complexity, of state ownership beyond direct and indirect ownership. The authors contribute to the literature on the performance effects of state ownership by studying a multitude of forms of governmental ownership as well as the role of competition in Russia. Especially the profitability of state-controlled firms is significantly affected by industry characteristics. Implications of the results are discussed both from firm and policy maker perspectives.

Details

International Journal of Emerging Markets, vol. 15 no. 2
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 10 July 2007

Mark Brimble and Allan Hodgson

This paper aims to examine the contemporary association between accounting information and a number of measures of systematic (beta) risk that incorporate dynamic market…

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2369

Abstract

Purpose

This paper aims to examine the contemporary association between accounting information and a number of measures of systematic (beta) risk that incorporate dynamic market features. The goal is to determine the fundamental accounting drivers of beta and to assess whether their explanatory variable power has changed or declined over time.

Design/methodology/approach

Beta estimates are calculated using adjustments for thin‐trading, central tendency, leverage, and time variance. Accounting risk variables are derived from theoretical foundations and prior empirical research, and classified as operating, financial or growth.

Findings

Results show a strong association between accounting variables (operating and growth) and systematic risk that is consistent over time, but with some industry and size differences and possible country effects. Accounting variables are able to capture dynamic risk shifts and generally are able to outperform naïve M‐GARCH and industry betas in predicting next year's systematic risk.

Practical implications

Internal management and external decision making enable the development of more efficient ex‐post risk measures, isolating actual risk determinants rather than just determining the level of risk, overcoming the problem that conventional ex‐post measures cannot be used for non‐listed entities, initial public offering firms, or those that do not have sufficient trading history, reduces the noise found in traditional risk estimates that rely on historical security returns, and the development of trading and valuation strategies.

Originality/value

This is the first paper that assesses the association between a range of dynamic risk measures and accounting variables and tests whether this long‐run association has changed over time.

Details

Managerial Finance, vol. 33 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 9 August 2008

Atle Midttun

The purpose of this paper is to note the remarkable expansion of corporate social responsibility (CSR) throughout the late 1990s and early 2000s. Taking this as point of

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4063

Abstract

Purpose

The purpose of this paper is to note the remarkable expansion of corporate social responsibility (CSR) throughout the late 1990s and early 2000s. Taking this as point of departure, it aims to discuss the potential for aligning CSR‐oriented industrial self‐regulation with public governance to fill some of the governance gap in the global economy.

Design/methodology/approach

The paper provides a conceptual discussion, empirically underpinned by three case studies.

Findings

The paper finds that it is plausible, and empirically supported by the case studies, to conceive of a considerable role for CSR based self‐regulation in the global economy. A central precondition is the ability of civil society organizations to establish “moral rights” as credible voices for “just causes” in a media‐driven communicative society, and thereby put pressure on brand sensitive industry. The paper finds that corporate self‐regulation may fill a larger part of the governance gap if public policy is oriented to engage with industry in a partnered mode.

Research limitations/implications

The paper establishes a conceptual base for exploring the governance implications of CSR, casuistically underpinned by three case studies. Further studies are needed, however, to explore the scale and scope of partnered governance in the global economy.

Practical implications

The paper provides insights into an approach to increase governability of the global economy.

Originality/value

The originality of the paper lies in exploring the implications of CSR for governance, and for highlighting how the governance potential may be enhanced by reorientation of public policy.

Details

Corporate Governance: The international journal of business in society, vol. 8 no. 4
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 1 October 2003

Brendan O’Dwyer

Furnishes a narrative reflecting an in‐depth examination of managerial conceptions of corporate social responsibility (CSR) in the Irish context. The narrative locates…

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29372

Abstract

Furnishes a narrative reflecting an in‐depth examination of managerial conceptions of corporate social responsibility (CSR) in the Irish context. The narrative locates itself within the debate surrounding the extent to which corporate management may capture social accountants’ efforts to promote a broad society‐centred conception of CSR. Three key findings emerge from the narrative. First, there is evidence of a tendency for managers to interpret CSR in a constricted fashion consistent with corporate goals of shareholder wealth maximisation. Second, pockets of robust resistance to and defences of this narrow conception do, however, also emerge in the narrative. Third, the complexity of conceiving of a clear meaning for CSR, particularly for those exposed to the structural pressures encountered by these managers, is apparent. This is evident in the initial, somewhat contradictory, nature of many of the conceptions analysed. Reflects on these findings and considers their broad implications for social accountants’ attempts to promote greater society centred corporate accountability in Ireland.

Details

Accounting, Auditing & Accountability Journal, vol. 16 no. 4
Type: Research Article
ISSN: 0951-3574

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