Green Signal and Global Sales: The Impact of Environmental Accounting Disclosure on Export Performance of Small Cap Firms in South Africa

Small and medium enterprises are an essential part of any economy as a result of their contributions to the economic output. However, the export performance of small businesses, especially in developing countries, is limited by environmental regulations enacted to achieve sustainability goals due to compliance costs. Moreover, there is a paucity of studies on how environmental disclosure practices impact the export performances of SMEs. Hence, this study investigates the effect of environmental accounting disclosure on the export performance of 15 small-cap companies in South Africa between 2015 and 2024. Using panel regression analysis, the result showed that environmental accounting disclosure (EAD) exerts a significant and negative impact on export revenue. Also, firms’ size (TA) has a direct and significant relationship, while market capitalization and leverage variables have no significant effect on export performance. In addition, the effect of exchange rate is positive and significant on export revenue. This study concludes that there is a possibility that the resource and compliance demand associated with environmental disclosure may be burdensome for export oriented small businesses in South Africa. Hence, the results from this study contradict the prediction of positive link proposed by Signalling theory and Resource based view. Therefore, there is a need for a supportive policy framework that will enable small cap exporters to pursue environmental transparency without weakening their international competitiveness.