Abstract
This study aims to provide a better understanding of material flow cost accounting (MFCA) application in developing countries, which are characterized by rapid structure transformation leading to serious environmental problems. By systematically reviewing the existing literature, our analysis of 28 studies from nine developing countries (China, Indonesia, Iran, Malaysia, South Africa, Sri Lanka, Thailand, the Philippines, and Vietnam) shows that MFCA research has primarily focused on Asian developing countries. Moreover, while the use of MFCA is often associated with improving eco-efficiency, the reviewed studies also indicate a high relevance for strategic decision-making processes within organizations. Finally, one of the key challenges in MFCA application reported in developing country studies lies in existing accounting systems with limited data availability and insufficient cost allocation. Based on our findings and gaps identified in the MFCA literature, we suggest paths for further research, including the necessity of quantitative research and comparative analysis of MFCA application across countries, the further investigation of MFCA application in small and medium-sized enterprises as well as in various manufacturing and service sectors in developing countries.
Highlights
The objective of this study is to provide a review of the existing literature on material flow cost accounting (MFCA) application in developing countries
This study aims to provide a better understanding of material flow cost accounting (MFCA) application in developing countries, which are characterized by rapid structure transformation leading to serious environmental problems
While the use of MFCA is often associated with improving eco-efficiency, the reviewed studies indicate a high relevance for strategic decision-making processes within organizations
Summary
The objective of this study is to provide a review of the existing literature on material flow cost accounting (MFCA) application in developing countries. 26 out of 28 publications used a qualitative research design (case studies) This number illustrates a general trend in MFCA research as it is a suitable strategy during the first stages of investigating the implementation of MFCA in developing countries because the case method is suitable for exploratory research [51]. Case studies primarily investigate MFCA implementation at one company in a specific country [52,53,54] rather than examining multiple cases across sectors and/or countries (e.g., comparative research designs). Surveying 123 companies, Salim et al [55], for example, show that there is a low level of MFCA implementation in Malaysia Another example is that Yagi and Kokubu [56] analyze the characteristics of material flow management to facilitate the expanded use of MFCA through surveying 101 firms in Thailand
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