The Moderating Effect of Sustainability Reporting and Accounting Information on Banks Performance

Résumé

This study empirically examined the effect of sustainability reporting and accounting information on the performance of banks in the Northern African country. It also examines the interactive term of accounting information and sustainability reporting in the region. The study employed an estimates of Driscroll-Kraay standard error, relying on the data of 45 banks across six Northern African region between 2008 and 2019. The estimates show that among the three ESG indexes, environmental and governance reporting have positive and significant effect on banks performance while social does not significantly affect the performance of banks in the Northern African region. Also, non-performing loans and loan to deposit ration have negative impacts on banks performance. The sizes of banks, composite index of sustainability reporting and the interactive term of sustainable reporting and accounting information have positive impact on banks performance in the Northern African region. This study concludes that the accounting information influences banks performance in countries where there is consistency in the accounting standard applications, and it is dependent on good environmental, social and governance disclosure in countries with inconsistency in their accounting standards. It is recommended that the Northern African commercial banks like many other firms globally should disclose their environmental, social and governance practices, be consistence in accounting standard practices and publish the necessary accounting information on their websites to boost their performances.