| Pub. Date | : July, 2021 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP70421 |
| Author Name | : Suresh Ramachandra and Dumitha Abeysinghe |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 30 |
The paper assesses whether Ethical and Sustainable Supply Chain (E&SSC) disclosures increase firm-values and competitive advantages of apparel manufacturing firms in the Generalized System of Preferences (GSP) certified countries. E&SSC disclosures by 40 apparel manufacturers from Bangladesh, India, Indonesia and Pakistan were compared with the Global Reporting Initiative (GRI) framework to ascertain the strength of disclosures. Multivariate analysis was employed to assess their impact on firm-values, measured by Tobin's Q, and competitive advantages using Organization Capital (OC) as the proxy. This study finds that E&SSC disclosures have a positive but not significant relationship with the values of firms. However, E&SSC disclosures were found to influence the competitiveness of firms positively and significantly, suggesting firms that disclose E&SSC matters have competitive advantages over those that do not disclose. There is no known study specifically referring to E&SSC disclosures in the apparel industry in GSP-certified countries. The findings will be useful to the apparel manufacturers in the GSP-certified countries and to customers in developed countries.
With the advent of global economic integration, more and more companies operate with
complex supply chains (Marshall et al., 2016). For example, Nestle works with 165,000 direct
suppliers and 695,000 farmers worldwide (Nestle, 2018). Due to operational and market
volatilities, the management of such complex supply chains has become increasingly challenging.
Besides, such companies also come under the scrutiny of regulators and stakeholders due to
increased media attention on their social, environmental and ethical dimensions of supply
chain activities (Okongwu et al., 2013).
Supply chains refer to the networks of upstream and downstream linkages that companies
possess to enable the provision of products and services to their ultimate consumers (Okongwu
et al., 2013). Since supply chains are vital to a company's operations and profitability,
information about them is sought after by external stakeholders to assess their efficacy and