The financial performance of listed firms in Tanzanian Dar es Salaam stock exchange (DSE): Does the disclosure of non-financial information (NFI) matter?

Abstract

Non-financial information (NFI) disclosure is increasingly important in investment decision-making and corporate accountability. However, empirical evidence regarding the relationship between NFI disclosure and firm performance remains inconclusive. This study examined the relationship between NFI disclosure and the financial performance of firms listed on the Dar es Salaam Stock Exchange (DSE), guided by Legitimacy Theory and Stakeholder Theory. A mixed-methods approach using an explanatory sequential design was employed, covering 21 locally listed firms over the period 2006–2019. Panel data were analysed using the Random Effects Model, while qualitative data obtained through semi-structured interviews were analysed thematically. Firm performance was measured using Return on Assets (ROA), while NFI disclosure was represented by corporate social responsibility information, corporate governance information, and risk management information. Firm age, firm size, and geographical diversification were included as control variables. The findings indicate a positive relationship between the NFI categories and ROA. The study concludes that greater NFI disclosure is associated with improved firm performance by enhancing transparency and stakeholder confidence. It recommends that managers strengthen NFI disclosure through appropriate communication channels and that regulators enhance monitoring of compliance with applicable NFI disclosure requirements.