Asian Journal of Economics, Business and Accounting

Aim: The objective of this study is to investigate the potential impacts of foreign ownership on the corporate sustainability disclosure (CSD) among listed firms in the East Africa Community (EAC) partner states.

Methodology: The study employed panel data from the year 2012 to 2022 that was extracted from 55 firms listed in EAC’s partner states stock/securities exchanges. The data on foreign ownership and corporate sustainability disclosure was obtained from the individual firm’s annual reports and the standalone sustainability reports. While, corporate sustainability was measured using the global reporting initiatives (GRI-4) content analysis. This study employed the OLS and the fixed effect panel data regression model.

Results: The empirical results indicated that foreign ownership had a positive and significant effect on CSD. Whereas having an individual assessment, we found that foreign ownership is positively associated with corporate sustainability disclosure practices.

Conclusion: Based on the findings, the study concluded that foreign ownership effectively improves sustainability disclosure practices among firms in developing regions such as EAC.  This could be attributed to the fact that foreign investors demand more corporate disclosure and transparency to lessen information asymmetry.

Implication: Results from this study have practical, theoretical, and policy implications. For instance, regulatory institutions need to reconsider the policy guidelines subject to ownership and activism of foreign shareholders in both among listed firms to enhance the sustainability disclosure practices.  On the other hands, corporate managers should embrace disclosure practices that are in line with ownership types. From a scientific perspective, the paper adds to the emerging literature on ownership structure and corporate social and environmental performance.