Environmental Cost and Financial Performance of Oil and Gas Companies in Nigeria

Anselm, Chiamogu; Okoye, Janefrances

doi:10.46654/ij.24889849.s6102

Cited by 7 publications

(23 citation statements)

References 10 publications

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“…Findings showed that business location costs exert a negative and highly significant effect on financial performance, while research and development costs and social costs have no significant effect on the financial performance of selected sampled extractive industries in Nigeria. The result negates the argument of Ahmed, Muhammed, and Jubril (2017).…”

Section: Fixed Effect Testmentioning

confidence: 60%

“…Corporate performance is no longer seen simply as a measure of profitability alone rather information on accounting for investment on environmental conservation is equally important. All categories of cost are to be considered as it arises so as to accord it the appropriate treatment in line with the international accounting principle of Generally Accepted Accounting Principle (GAAP) (Nwaiwu and Oluka, 2018). Environmental cost can be defined as the generation and analysis of both financial and non-financial information in order to support internal environmental conservation.…”

Section: Literature Review Environmental Costmentioning

confidence: 99%

“…This study therefore, reviewed considerable literatures from both local and international authors. Nwaiwu and Oluka (2018) conducted research to examine whether there is a significant relationship between environmental cost disclosure and financial performance of oil and gas companies in Nigeria. Time series data from 2011 to 2015 were collected from annual financial report of quoted oil and gas companies.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…The United Nations Conference on Trade and Development (2002) defines the extractive industry as a process that involve different activities that lead to the extraction of raw materials from the earth (such as oil, metals, mineral and aggregates), processing and utilization by consumers. Nwaiwu and Oluka (2018) opined that Nigeria being a developing nation has massive degradation and destruction of environmental systems and natural resources which continually threatens sustainable development in a bid to remain a going concern. That is to say, whether investing in environmental conservation improves corporate performance which Jensen (2002) considers as the core objective of every firm.…”

Section: Introductionmentioning

confidence: 99%

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Environmental Costs and Financial Performance in Nigeria's Selected Extractive Industry

Abiola,

Agboola Olugbenga

2021

KIJHUS

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The continued depletion of environmental resources in a bid to meet up with human needs coupled with the desire of every business entity to remain profitable has aroused the need to explore the right mix to balance the desire of all stakeholders. This study thus examined the effect of environmental cost on financial performance in the extractive industry in Nigeria. 18 companies listed on the Nigerian Stock Exchange were sampled for the study and secondary data from their annual financial reports for a period of 11 years (2010-2020) was collected and analyzed using panel regression estimation model. Findings from the result (R2 = 0.476728: F-statistic < 0.01) indicates that cost of Environmental variables like Environmental Remediation Cost, Administrative Cost has a positive effect on Financial performance, Business location Cost has a negative and highly significant effect on financial performance while Research and Development Cost and Social Cost has no effect on financial performance of selected sampled extractive industry in Nigeria. The study therefore concluded that Business location Cost exert negative and highly significant effect on financial performance while Research and Development Cost and Social Cost has no significant effect on financial performance of selected sampled extractive industry in Nigeria. Thus, it was recommended that extractive industry in Nigeria should be objective in their financial expenses so as to improve on their performance possibilities.

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Section: Fixed Effect Testmentioning

confidence: 60%

Section: Literature Review Environmental Costmentioning

confidence: 99%

Section: Empirical Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Environmental Costs and Financial Performance in Nigeria's Selected Extractive Industry

Abiola,

Agboola Olugbenga

2021

KIJHUS

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“…In contrast, Nwaiwu and Oluka (2018) examine the effect of environmental cost and financial performance measures of quoted oil and gas companies in Nigeria. Time series data were collected from annual financial reporting and economic review of Central Bank of Nigeria.…”

Section: Empirical Reviewmentioning

confidence: 99%

Community Development Cost and Financial Performance of Oil and Gas Firms in Nigeria

Micah Juwon,

Olaoye

2021

KIJHUS

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This study examined community development and financial performance of oil and gas firms in Nigeria. Specifically, the study analyzed the effect of community development cost on return on asset of selected oil and gas firms. Six (6) oil and gas firms were sampled for the study and data were collated from published annual reports of these firms over the period of 10 years, spanning between 2010 and 2019. Data were analyzed using panel based estimation techniques and evaluations were done for the most consistent and efficient result based on restricted F-test and Hausman test. Result showed that a unit increase in community development cost by 1 billion naira led to insignificant increase in return on asset by 0.7%. By implication this result showed that increase in the level of community development cost of oil and gas firms in Nigeria significantly influenced the performance of oil and gas firms as measured in terms of return on asset. This study concluded first that engagement in community development in Nigeria by oil and gas firms has the potential to culminate into improved corporate performance; however, such potential is yet to be fully harnessed by most of the oil and gas firms in Nigeria. Hence oil and gas firms in the country, should be more objective in their engagement in community development in the country, so as to further boost their performance potential.

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Environmental Accounting Disclosures and Financial Performance of Listed Oil and Gas Companies in Nigeria: An Application of Driscoll-Kraay Standard Errors Approach

Afolabi,

Amosun,

Okunade

et al. 2024

Preprint

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The oil and gas industry in Nigeria, a vital contributor to the nation's economy, has long been associated with significant environmental challenges. Pollution, habitat destruction, and greenhouse gas emissions have raised global concerns about sustainability and corporate responsibility. This empirical study explores the relationship between environmental accounting practices and the financial performance of listed oil and gas companies in Nigeria. We investigated eight oil and gas companies that are publicly traded on the Nigerian Stock Exchange Market (NGX) as of January 17, 2022, from 2011 to 2022. The study employs Driscoll-Kraay standard errors and reveals that environmental accounting had significant effects on returns on assets, earnings per share, and liquidity ratio. The study revealed that the implementation of environmental accounting practices had diverse effects on the performance of oil and gas companies in Nigeria. The findings encourage policymakers and stakeholders in the sector to utilise the insights and design more effective regulations and incentives that promote environmental corporate responsibility. Also, valuable insights into the potential benefits and challenges associated with adopting environmental accounting practices, and influencing the decision-making processes of corporate stakeholders were provided to ensure sustainability in terms of improved financial performance of the oil and gas sector in Nigeria.

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Environmental Cost and Financial Performance of Oil and Gas Companies in Nigeria

Cited by 7 publications

References 10 publications

Environmental Costs and Financial Performance in Nigeria's Selected Extractive Industry

Environmental Costs and Financial Performance in Nigeria's Selected Extractive Industry

Community Development Cost and Financial Performance of Oil and Gas Firms in Nigeria

Environmental Accounting Disclosures and Financial Performance of Listed Oil and Gas Companies in Nigeria: An Application of Driscoll-Kraay Standard Errors Approach

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