The Effect of National Business Systems on Social and Environmental Disclosure: A Comparison between Brazil and Canada

3.
Pedro de Barros Leal Pinheiro Marino, Master in Business and Accounting, Business Department, Federal Institute of Brasilia, Brasilia, Brazil. E-mail: pedroblpmarino@gmail.com

4.
Silvia Maria Dias Pedro Rebouças, PhD, Business Department, Federal University of Ceará, Fortaleza, Brazil. E-mail: smdpedro@gmail.com

Responsible editor:

Prof. Dr. João Mauricio Gama Boaventura

Contribution of each author

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Contribution Romulo Alves Mônica Cavalcanti Pedro Marino Silvia Rebouças 1. Definition of research problem √ √ √ 2. Development of hypotheses or research questions ( empirical studies ) √ √ √ 3. Development of theoretical propositions (theoretical Work ) √ √ 4. Theoretical foundation/Literature review √ √ 5. Definition of methodological procedures √ √ √ 6. Data collection √ √ 7. Statistical analysis √ √ 8. Analysis and interpretation of data √ √ √ 9. Critical revision of the manuscript √ 10. Manuscript Writing √ √ √ 11. Other (please specify which)

Contribution	Romulo Alves	Mônica Cavalcanti	Pedro Marino	Silvia Rebouças
1. Definition of research problem	√	√	√
2. Development of hypotheses or research questions ( empirical studies )	√	√	√
3. Development of theoretical propositions (theoretical Work )	√	√
4. Theoretical foundation/Literature review	√	√
5. Definition of methodological procedures	√		√	√
6. Data collection	√		√
7. Statistical analysis	√			√
8. Analysis and interpretation of data	√	√		√
9. Critical revision of the manuscript		√
10. Manuscript Writing	√	√	√
11. Other (please specify which)

Country	Number of firms per sector			Total	Number of observations per sector			Total
Country	Oil and gas	Basic materials	Utilities		Oil and gas	Basic materials	Utilities
Brazil	2	7	7	16	17	50	60	127
Brazil	12.4 %	43.8 %	43.8 %	100%	13.4 %	39.4 %	47.2 %	100%
Canada	7	8	2	17	53	64	15	132
Canada	41.2 %	47.1 %	11.7 %	100%	40.2 %	48.5 %	11.4 %	100%
Total	9	15	9	33	70	114	75	259
Total	27.3 %	45.4 %	27.3 %	100%	27.0 %	44.0 %	29.0 %	100%

Characteristics	Values
Absent indicator	0
Absolute or relative performance information is presented	1
Information is presented and compared with other firms in the sector	+1
Information is presented and compared with previous periods	+1
Information is presented and compared with targets	+1
Information is presented also in normalized form	+1
Information is presented in disaggregated form	+1
Maximum points per indicator	6

Variables	Indicator	Description	Operationalization	Data source
Political system (POL)	Worldwide Governance Indicators	Set of indicators used to assess the quality of public governance in the country	WGI indicators involve six dimensions: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, the rule of law, and control of corruption. The indicators are measured on a scale from -2.5 to 2.5	The World Bank
Financial system (FIN)	Financing through the local equity market	Related to the company’s capacity to fund its activities through the equity market	Executives’ opinions on how easy it is for private businesses to obtain equity funding by trading stocks and securities, using a scale from 1 to 7	World Economic Forum’s (WEF) Global Competitiveness Index (GCI)
Education system (EDU)	Quality of the education system	Related to the quality of the education system based on four elements of the teaching structure	Executives’ opinions on how the country’s education system responds to the need for a competitive economy, using a scale from 1 to 7
Labor system (LAB)	Cooperation in labor-employer relations	Related to cooperation in the worker-employer relationship	Executives’ opinions on the working conditions, using a scale from 1 to 7

System	Country	2007	2008	2009	2010	2011	2012	2013	2014	2015	Wilcoxon test
Political	Brazil	0.477	0.494	0.511	0.522	0.518	0.510	0.495	0.488	0.466	***
Political	Canada	0.817	0.822	0.829	0.822	0.823	0.824	0.822	0.830	0.828	***
Financial	Brazil	0.683	0.662	0.606	0.560	0.605	0.580	0.550	0.520	0.488	***
Financial	Canada	0.784	0.729	0.670	0.673	0.712	0.695	0.668	0.698	0.733	***
Education	Brazil	0.358	0.386	0.430	0.446	0.429	0.424	0.426	0.389	0.349	***
Education	Canada	0.755	0.798	0.819	0.808	0.775	0.772	0.750	0.749	0.729	***
Labor	Brazil	0.596	0.618	0.601	0.583	0.597	0.608	0.591	0.534	0.510	***
Labor	Canada	0.690	0.696	0.703	0.713	0.723	0.721	0.704	0.708	0.726	***

Indicators	Brazil		Canada		T test
Indicators	µ	σ	µ	σ
Description of the significant impacts on the biodiversity of any activities, products, and services in protected areas and those with a high biodiversity index outside protected areas	1.31	0.90	0.99	0.94	0.006
Percentage of recycled materials used	0.96	1.07	0.53	0.81	0.000
Total direct emissions of greenhouse gases, by weight	0.94	0.89	0.77	0.77	0.095
Percentage of packaging recovered in relation to the total number of products sold	0.26	0.70	0.12	0.34	0.035
Relevant indirect emissions of greenhouses gases, by weight	1.97	1.30	2.52	1.28	0.001
Total discharge of water, by quality and destination	1.43	1.58	1.82	1.41	0.035
NO_x, SO_x, and other significant atmospheric emissions, by type and weight	0.46	0.88	0.98	1.13	0.000
Total water used according to its source	1.86	1.47	1.77	1.36	0.628
Direct consumption of energy according to the primary source	1.83	1.09	1.85	1.36	0.937
Total weight of waste, by type and method of disposal	1.64	1.40	1.76	1.25	0.456
Location and size of the properties owned, leased, or administered within protected areas or adjacent to them, and areas with a high biodiversity index outside protected areas	1.36	1.45	1.39	1.16	0.878
Indirect consumption of energy according to the primary source	1.35	1.42	1.42	1.29	0.645
Emission of substances that destroy the ozone layer, by weight	1.23	1.24	1.04	1.19	0.218
Initiatives to mitigate the environmental impacts of products and services and the extent of the reduction of these impacts	1.20	0.92	1.29	0.85	0.424
Financial implications and other risks and opportunities due to climate change	0.99	0.81	0.93	0.82	0.517

Indicators	Brazil		Canada		T test
Indicators	µ	σ	µ	σ	T test
Total employees, by type of employment, labor contract, and region	1.89	1.20	1.61	1.04	0.046
Average hours of training per year, per employee, defined by their job category	1.65	1.03	0.58	0.91	0.000
Composition of the groups responsible for corporate governance and the listing of employees by category, according to gender, age, minorities, and other indicators of diversity	1.46	1.21	0.93	1.18	0.000
The proportion of base salary between men and women per job category	1.06	1.15	0.48	0.91	0.000
Operations identified as a significant risk in terms of involving child labor and the measures taken to contribute to the abolition of child labor	0.93	0.92	0.27	0.45	0.000
Operations identified as a significant risk in terms of involving forced labor or any kind of slavery and the measures taken for the eradication of this type of work	0.92	0.91	0.27	0.45	0.000
Measures taken in response to cases of corruption	0.85	0.91	0.67	0.81	0.093
Total number of cases of discrimination and the measures taken	0.72	0.75	0.46	0.65	0.002
Type of information about products and services required by labeling procedures, and the percentage of products and services subject to these requirements	0.42	0.53	0.23	0.53	0.004
Phases of the life cycle of products and services in which the impacts on health and safety are evaluated for improvements to be made, and the percentage of products and services subject to these procedures.	0.34	0.51	0.18	0.41	0.006
Rate of injuries, occupational illnesses, number of days lost, absenteeism, and work-related deaths, per region	1.76	1.28	2.18	1.06	0.005
Total number and turnover rate of employees, by age, gender, and region	1.68	1.21	1.56	1.08	0.415
Development and impact of investment in infrastructure and services offered particularly for the benefit of the public, by means of commercial involvement, in cash or pro bono activities	1.49	1.12	1.64	1.22	0.286
Coverage of the obligations related to the defined benefit pension plan that the organization offers	1.06	0.90	1.02	1.16	0.796
Policies, practices, and proportions of spending with local suppliers by important operating units	1.03	1.05	1.19	1.20	0.254

Variables	Firms in Brazil		Firms in Canada
Variables	Coefficient	P-value	Coefficient	P-value
Intercept	-0.536	0.205	0.931	0.489
POL	2.111	0.072*	-0.383	0.799
FIN	-0.793	0.018**	-0.597	0.002***
EDU	-1.158	0.160	-0.779	0.000***
LAB	1.050	0.071*	0.668	0.162
Size	0.003	0.870	0.005	0.145
ROA	0.072	0.507	0.060	0.440
Leverage ratio	-0.082	0.301	-0.001	0.989
Wald χ²	19.01 (0.000)		29.28 (0.000)
R²	0.107		0.056
Hausman test	2.26 (0.944)		0.52 (0.999)
Effect	Random		Random

Hypothesis		Relationship	Result	Country	Supported
H₁	POL→SED	+	Positive effect of public governance on disclosure	Brazil	YES
H₁	POL→SED	+	Positive effect of public governance on disclosure	Canada	NO
H₂	FIN→SED	-	Negative effect of the ease of raising funds on disclosure	Brazil	YES
H₂	FIN→SED	-	Negative effect of the ease of raising funds on disclosure	Canada	YES
H₃	EDU→SED	+	Negative effect of the quality of education on disclosure	Brazil	NO
H₃	EDU→SED	+	Negative effect of the quality of education on disclosure	Canada	NO
H₄	LAB→SED	+	Positive effect of the employer-employee collaboration on disclosure	Brazil	YES
H₄	LAB→SED	+		Canada	NO

[1] 1.
Romulo Alves Soares, PhD Candidate, Federal University of Ceará, Fortaleza, Brazil. E-mail: romulosoares@ufc.br

Brasil

Brasil

The Effect of National Business Systems on Social and Environmental Disclosure: A Comparison between Brazil and Canada

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