Statistical Evidence of Environmental Management Effects on Financial Reporting in Barranquilla Manufacturing

Abstract

This study analyzed the relationship between environmental management systems and financial reporting quality in Barranquilla's manufacturing sector, considering the influence of company size and local economic conditions. The research evaluated data from 45 manufacturing companies over a five-year period (2019-2023) through multiple statistical approaches. Principal Component Analysis and Durbin-Watson testing validated data quality and temporal independence. Hierarchical regression modeling indicated strong associations between environmental management scores and reporting quality (β = 0.412, p < 0.001). Granger causality testing established temporal precedence of environmental management improvements leading to enhanced financial reporting, with strongest effects within one quarter (F = 8.45, p = 0.003). Two-stage least squares regression confirmed causal relationships (β = 0.523, p < 0.001) while addressing endogeneity concerns. The results indicated that companies implementing robust environmental management systems maintained higher financial reporting quality, with effects moderated by organizational scale. Medium and large enterprises showed stronger relationships between environmental practices and reporting standards. The findings advanced understanding of how environmental management practices influenced financial reporting in regional manufacturing contexts while highlighting the role of company size and local economic conditions. The study suggested practical applications for manufacturing organizations and regulatory frameworks while establishing foundations for future research in environmental management effectiveness.