Economic Policy Uncertainty and Corporate Sustainability Disclosure: Evidence from Developing Economies
Economic Policy Uncertainty and Corporate Sustainability Disclosure: Evidence from Developing Economies

Summary/Abstract: Researchers increasingly recognise economic policy uncertainty (EPU) as a key determinant of corporate disclosure behaviour. Yet they have largely overlooked its relationship with corporate sustainability disclosure (CSD) in Sub-Saharan Africa. This study investigates the effect of EPU on CSD using a balanced panel dataset of 170 listed firms from Nigeria, Ghana, Kenya, and South Africa over the period 2015 to 2024 (850 firm-year observations). Employing a fixed-effects panel regression framework augmented by generalised method of moments (GMM) estimation for endogeneity correction, the results reveal that EPU exerts a statistically significant and economically meaningful negative effect on corporate sustainability disclosure (β = −0.1843; p < 0.001). Firm size (β = 0.6214; p < 0.001), profitability (β = 0.3147; p < 0.001), board size (β = 0.4823; p < 0.001), and institutional ownership (β = 0.2741; p < 0.001) emerge as significant positive determinants of CSD, while leverage exerts a significant negative effect (β = −0.0891; p < 0.05). Sub-group analyses by country confirm the negative EPU–CSD relationship across all sampled economies, with the effect being stronger in Nigeria and Ghana. Robustness checks, including GMM, random-effects FGLS, lagged EPU, sector exclusion, and sub-period analyses, corroborate the baseline findings. These results contribute to stakeholder theory, legitimacy theory, and the nascent EPU–sustainability literature, and carry practical implications for corporate boards, sustainability practitioners, and policymakers across developing economies.

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