The Determinants of Sustainability Disclosure Performance of Ghanaian Public Sector Entities

Abstract

Sustainability disclosure in public sector entities (PSEs) is increasingly critical in developing economies, where fiscal transparency, environmental stewardship, and social legitimacy integrate with public governance. Yet, most empirical evidence remains concentrated on private firms in developed markets. This study investigates the determinants of disclosure-based sustainability performance in Ghanaian public sector entities using an unbalanced panel of 47 public entities from 2017 to 2023. To address unobserved endogeneity, heterogeneity, and long-run dynamics, the study employs Fixed Effects, Robust Least Squares, dynamic panel Generalised Method of Moments (GMM) and Dynamic Ordinary Least Squares (DOLS) estimation. The results reveal that leverage and audit quality consistently and positively influence sustainability disclosure performance. In contrast, liquidity exhibits a negative association in the dynamic specification. Board size and gender diversity reveal a positive long-run governance effect, whereas profitability and firm size exhibit limited explanatory power. The findings suggest that internal financial characteristics and institutional governance framework are key factors in shaping sustainability disclosure within Ghana’s public entities. The study contributes to the sustainability accounting literature by extending agency and institutional theory into the public sector domain in Sub-Saharan Africa and by providing actionable policy recommendations for strengthening sustainability governance frameworks.