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Non-Financial Reporting And Elements Of Performance - Analysis Of State Owned Enterprises In Croatia, Slovenia And Hungary

Author

Listed:
  • Martina Dragija Kostic

    (University of Zagreb, Faculty of Economics and Business)

  • Josip Cicak

    (University of Rijeka, Faculty of Economics and Business)

  • Matko Ljubic

    (University of Zagreb, Faculty of Economics and Business)

Abstract

Background: Non-financial reporting in the public sector is a relatively new topic. In the European Union, through Directive 2014/95/EU, non-financial reporting of public interest entities with over five hundred employees at the reporting date was introduced. Thus, member states are obliged to incorporate non-financial reporting into their national legislation. Purpose: The paper examines the assumption that more profitable companies will publish more information in non-financial reports to show their performance. Another assumption is that more indebted companies are producing more non-financial disclosures. Therefore, the purpose of this study was to determine whether there was a relationship between the information that is made public in public sector enterprises' (SOEs') non-financial reports and their financial performance. Methods/Approach: The paper analyses data from publicly available non-financial reports of SOEs for the period 2017-2019. The sample consists of 27 companies, including 10 Croatian SOEs, 10 Slovenian SOEs, and 7 Hungarian SOEs. Findings: Based on the conducted research we have drawn following findings; State ownership has a negative impact on the information provided in non-financial reports, while the quantity of information provided and the number of employees are positively correlated. Profitability has a negative impact on non-financial reporting, while a higher net profit will increase non-financial disclosures. Leverage has a positive impact on the IRD index in the sample of Croatia and Slovenia that was observed. Conclusion: Non-financial reporting has been implemented in accordance with Directive 2014/95/EU. In the examined sample of SOEs a correlation was found between non-financial reporting and the profitability and indebtedness of SOEs. Originality: Research in the paper has been made on previously unresearched examples – SOEs non-financial reporting in Croatia, Slovenia and Hungary.

Suggested Citation

  • Martina Dragija Kostic & Josip Cicak & Matko Ljubic, 2022. "Non-Financial Reporting And Elements Of Performance - Analysis Of State Owned Enterprises In Croatia, Slovenia And Hungary," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 31(2), pages 397-420, december.
    • Handle: RePEc:avo:emipdu:v:31:y:2022:i:2:p:397-420
    DOI: 10.17818/EMIP/2022/2.3
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    References listed on IDEAS

    as
    1. Francesca Manes-Rossi & Giuseppe Nicolò & Daniela Argento, 2020. "Non-financial reporting formats in public sector organizations: a structured literature review," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 32(4), pages 639-669, July.
    2. Lucia Biondi & Enrico Bracci, 2018. "Sustainability, Popular and Integrated Reporting in the Public Sector: A Fad and Fashion Perspective," Sustainability, MDPI, vol. 10(9), pages 1-16, August.
    3. Dr Andrea B Coulson ,Professor Carol Adams ,Mr Michael N. Nugent ,Prof. Kathryn Hayes & Neelam Setia & Subhash Abhayawansa & Mahesh Joshi & Anh Vu Huynh, 2015. "Integrated reporting in South Africa: some initial evidence," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 6(3), pages 397-424, September.
    4. Neelam Setia & Subhash Abhayawansa & Mahesh Joshi & Anh Vu Huynh, 2015. "Integrated reporting in South Africa: some initial evidence," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 6(3), pages 397-424, September.
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    More about this item

    Keywords

    non-financial reporting; state owned enterprises; performance;
    All these keywords.

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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