Building firm survival through corporate reputation in Thai listed firms: roles of accounting sustainability.

• Author: Ussahawanitchakit, Phapruke
• Position: Report

1. INTRODUCTION

   Recently, accounting sustainability has been an outcome of providing best accounting practices, activities, procedures, and methods. Essentially, it plays a significant role in explaining, driving and determining the level of corporate image. It is the representing process for information collection and communication to support internal decision making leading to implementing corporate sustainability (Burritt and Schaltegger, 2010). Generally, accounting sustainability presents the result of the demand from managers to position the company in society and the market and to communicate achievements. Firms with greater accounting sustainability tend to achieve corporate reputation and, hence, gain organizational survival. Accordingly, accounting sustainability is proposed to have a positive association with corporate image. In this study, accounting sustainability includes transparency, inclusiveness and auditability (Lamberton, 2005). Firstly, transparency is the full disclosure of the processes, procedures and assumptions in financial report preparation. Secondly, inclusiveness is the reporting organization to systematically engage in its stakeholders to help focus and continually enhance quality of financial report. Thirdly, auditability is the reported data and information recorded, complied, analyzed, and disclosed in a way that would enable internal auditors or external assurance providers to attest to its reliability. Thus, accounting sustainability is likely to become the antecedent of corporate reputation.

   To explicitly achieve organizational survival in the competitive markets and environments, corporate reputation becomes a key driver of enhancing firms' survival through staying with their business activities in the existing competitive environments and doing these activities in the future markets. Besides, it is the overall evaluation of the extent to which firms are substantially good or bad (Keh and Xie, 2009). It occurs from quality of inputs, quality of productive assets, media rankings, certification of achievement, and affiliation with high status institutions. Basically, firms with greater corporate reputation tend to delay rival mobility in the industry, attract higher-quality and larger amounts of investments from the stock market, and charge price premium on customers at least in highly uncertain markets (Cravens et al., 2003). They maintain a high spirit among employees, enjoy a cost advantage due to less contracting and monitoring costs with suppliers, lower remuneration rate among employees, support and enhance new product introduction, and recovery strategies in the even of a crisis. Then, corporate reputation tends to encourage their survival in the turbulent and uncertain business activities. Also, corporate reputation is likely to mediate the relationships between accounting sustainability and firm survival. Therefore, it is proposed to become the mediator of the research relationships.

   Essentially, the objective of this study is to examine the influences of accounting sustainability on firm survival of Thai listed firms via corporate reputation as a mediator. Here, 114 Thai listed firms are the sample of the study. The key research questions are: (1) how accounting sustainability has a significant influence on corporate reputation, (2) how corporate reputation has an important effect on firm survival, (3) whether corporate reputation is the mediator of the relationships, and (4) whether the aforementioned relationships are positive.

   This study is outlined as follows. The first section reviews existing significant literature in the areas and streams of accounting sustainability, corporate reputation and firm survival, links between the concepts of the aforementioned variables, and develops the key research hypotheses of those relationships. The second explicitly details research methods, including data collection, measurements, and statistics used. The third gives the results of the analysis and the corresponding discussion. The final summarizes the findings of the study, points out both theoretical and managerial contributions, and presents suggestions for further research and the limitations of the study are also presented.

2. ACCOUNTING SUSTAINABILITY AND THE RELATIONSHIPS

   In this study, accounting sustainability, corporate reputation and firm survival are independent variable, mediating variable and dependent variable of the study respectively. Thus, the conceptual, linkage, and research model presents the associations among accounting sustainability, corporate reputation and firm survival as shown in Figure 1 below.

   2.1 Accounting Sustainability

   Accounting sustainability is an outcome of providing best accounting practices, activities, procedures, and methods. It becomes a key driver of explaining and determining firms' reputation and image. Here, accounting sustainability is defined as the representing the process for information collection and communication to support internal decision making leading to implementing corporate sustainability (Burritt and Schaltegger, 2010). It explicitly presents the results of the demands from managers to position the company in society and the market and to communicate achievements. Likewise, accounting sustainability is a vehicle for levering the changes in corporate attitudes and actions necessary to move towards the different kinds of organizational decision making consistent with social and ecological sustainability (Ball, 2004). It includes transparency (the full disclosure of the processes, procedures and assumptions in financial report preparation), inclusiveness (the reporting organization to systematically engage in its stakeholders to help focus and continually enhance the quality of it financial...