ESG Disclosure in Ghana: Stakeholder Pressure & GTI Mediation
Stakeholder pressure significantly drives ESG disclosure (SD) in Ghanaian manufacturing and mining firms. Specifically, pressure from shareholders and consumers, mediated by Green Technology Innovation (GTI), strongly enhances SD. While government pressure directly impacts disclosure, GTI does not mediate this relationship, highlighting the critical role of market-driven and internal technological responses.
Key Takeaways
Shareholder and consumer pressure are key drivers for ESG disclosure in Ghana.
Green Technology Innovation (GTI) acts as a mediator between pressure and disclosure.
Government pressure directly influences disclosure but is not mediated by GTI adoption.
The study used PLS-SEM on data from 383 Ghanaian manufacturing and mining firms.
What theoretical frameworks explain ESG disclosure driven by external pressure?
The theoretical foundation for understanding ESG disclosure in Ghana rests primarily on Stakeholder Theory and Institutional Theory, supplemented by the concept of Green Technology Innovation (GTI). Stakeholder Theory posits that corporate obligations extend beyond mere profit maximization to satisfy the diverse interests of various parties, such as consumers and shareholders, driving the need for legitimacy through ESG reporting. Institutional Theory explains how external pressures—coercive (regulation), mimetic (competition), and normative (market)—influence firms to adopt standardized reporting structures and methods to gain social acceptance and stability. GTI is viewed as a strategic, analytical response to these pressures, focusing on creating technologies that actively reduce ecological impact.
- Stakeholder Theory (ST): Emphasizes that corporate obligations extend beyond owners, as argued by Freeman (1984), driving ESG reporting to build legitimacy and trust among stakeholders. It focuses on balancing the interests of various parties, including shareholders and consumers.
- Institutional Theory: Explains the adoption of reporting practices through isomorphism—coercive (regulatory), mimetic (competitive), and normative (market) pressures—where external demands significantly influence a firm's structure and reporting methods.
- Green Technology Innovation (GTI): Involves creating new technologies specifically designed to reduce ecological impact, such as minimizing greenhouse gas emissions and waste, often viewed as an analytical response to regulatory and consumer pressures.
What relationships were hypothesized regarding stakeholder pressure, GTI, and ESG disclosure?
The research hypothesized three main types of relationships concerning Sustainability Disclosure (SD) in Ghanaian firms. The first set proposed a direct positive link between various stakeholder pressures—Shareholder Pressure (SP), Government Pressure (GP), and Consumer Pressure (CP)—and SD, all of which were accepted. The second set examined the direct influence of these pressures on Green Technology Innovation (GTI), finding that SP and CP positively influence GTI, but GP does not. Finally, the third set tested the mediating role of GTI, predicting that GTI would channel the effects of stakeholder pressure into enhanced SD, a relationship found to be significant for shareholder and consumer pressure, but not for government pressure.
- Direct Relationships (Pressure -> SD): Hypothesized and accepted that Shareholder Pressure (H1), Government Pressure (H2), and Consumer Pressure (H3) all have a direct positive impact on Sustainability Disclosure (SD).
- Pressure -> GTI Relationships: Hypothesized that Shareholder Pressure (H4) and Consumer Pressure (H6) positively influence GTI (both accepted), but Government Pressure (H5) was hypothesized to influence GTI and was rejected.
- GTI Mediation Role (Pressure -> GTI -> SD): Hypothesized that GTI fully or significantly mediates the relationship between Shareholder Pressure and SD (H7, accepted), and Consumer Pressure and SD (H9, accepted). However, the mediation role of GTI between Government Pressure and SD (H8) was rejected as insignificant.
How was the study conducted, and what were the primary findings on direct and mediated effects?
This quantitative study utilized primary data collected through a questionnaire survey involving 383 respondents from the Manufacturing and Mining sectors in Ghana. The analysis employed Partial Least Squares Structural Equation Modeling (PLS-SEM v4.0) to test the complex relationships between stakeholder pressure, Green Technology Innovation (GTI), and Sustainability Disclosure (SD). Key results confirmed that all three types of pressure—Consumer, Government, and Shareholder—exert a significant positive direct impact on SD. Crucially, the model demonstrated excellent fit, with an R-square value for SD at 0.924, indicating a very high explanatory power for the variables studied, and confirming the validity and reliability of the measurements used.
- Primary Research Method: Quantitative design using primary data collected via a survey questionnaire from 383 respondents in the Ghanaian Manufacturing and Mining industries.
- Analytical Technique: Partial Least Squares Structural Equation Modeling (PLS-SEM v4.0) was used to analyze the data and test the hypothesized structural relationships.
- Key Direct Impact Findings: Consumer Pressure (CP), Government Pressure (GP), and Shareholder Pressure (SP) all demonstrated a significant positive impact on Sustainability Disclosure (SD).
- Key Mediation Findings: GTI positively mediates the relationship between Shareholder Pressure (SP) and SD, and between Consumer Pressure (CP) and SD, but GTI does not mediate the relationship between Government Pressure (GP) and SD.
- Model Suitability: The model exhibited strong statistical fit, with a high R-square value for SD (0.924) and confirmation of convergent and discriminant validity (AVE > 0.703), indicating no multicollinearity (VIF < 3.3).
What are the practical implications and academic contributions of this research on ESG disclosure?
The findings offer significant practical implications for managers and regulators in emerging economies like Ghana, while also making substantial academic contributions. Practically, managers must prioritize responding to the demands of shareholders and consumers, integrating Green Technology Innovation (GTI) into operational processes and product design to effectively mitigate environmental impacts and enhance disclosure. Regulators should consider targeted interventions to improve ESG transparency, recognizing that market-driven pressures are highly effective. Academically, the study enriches institutional theory by providing a contextual dimension specific to Sub-Saharan African (SSA) developing economies and highlights the crucial, often overlooked, mediating role of GTI in the pressure-disclosure pathway.
- Policy Implications for Managers: Managers should prioritize addressing the demands of Shareholders and Consumers and actively integrate GTI into design and processes to reduce ecological impact.
- Policy Implications for Regulators: Regulators need to consider interventions that enhance ESG transparency, leveraging the observed effectiveness of market and shareholder pressures.
- Academic Contributions: The research adds a contextual dimension (developing economy/SSA) to institutional theory and highlights the significant mediating role of GTI, moving beyond simple direct relationships.
- Holistic View of GTI: The study contributes by adopting a holistic perspective of GTI, encompassing both process and product innovations in the context of sustainability reporting.
- Research Limitations: The study's scope was limited to data from the Ghanaian manufacturing and mining sectors, excluded pressures from Employees and Creditors, and did not incorporate moderating variables like organizational culture.
Frequently Asked Questions
Which stakeholder pressures most effectively drive ESG disclosure in Ghana?
Shareholder Pressure (SP) and Consumer Pressure (CP) are the most effective drivers. Both directly influence disclosure and their impact is significantly mediated by the adoption of Green Technology Innovation (GTI).
What is the role of Green Technology Innovation (GTI) in ESG disclosure?
GTI acts as a positive mediator, channeling the pressure from shareholders and consumers into enhanced Sustainability Disclosure (SD). It represents the firm's strategic response to ecological demands.
Why did Government Pressure not show mediation through GTI?
While Government Pressure (GP) directly influences disclosure, the study found that firms' responses to GP do not significantly involve the adoption of GTI as an intermediary step toward improving sustainability reporting.
