Material Flow Cost Accounting in Developing Countries: A Systematic Review

Abstract

<jats:p>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.</jats:p>

Ecological Management Accounting—Taking into Account Sustainability, Does Accounting Have Far to Travel?

“…The relationship between these two groupings needs to be more carefully developed. There are already some approaches that may help with this process-Accounting For the Management of Ecosystems [63] and Material Flow Cost Accounting [12] are two good examples of approaches that are starting to build the bridge between how the organization measures value on environmental issues, and the planetary measures and values. Further development of these accounting approaches, with an awareness of the factors impacting on the development of ecological accounting, will help shape the development of ecological management accounting into the near future [10,70].…”

“…The final suggestion for further research is in terms of the 'planetary boundaries' [2] and how the relationship between an organization and planetary environmental concerns have started to be bridged using concepts such as AFME [63] and Material Flow Cost Accounting [12]. Further research in these areas would fruitfully develop environmental accounting and may even support and encourage the creation of a stand-alone ecological accounting field.…”

“…The biggest challenge is trying to link macro issues such as planetary boundaries to organization concepts. This is developed into nine planetary areas, and when related to environmental management accounting research and concepts, Environmental Management Accounting (EMA) has been an example linked using material flow cost accounting [2] (p. 21) [12]. These are seen as intermediate issues that are close to the business operations.…”

Improving decision-making through material flow cost accounting: the case of VietGreen bottled mineral water company

“…Germany and Japan (METI, 2010;Wagner, 2015)) and developing countries (e.g. Vietnam, Thailand, and the Philippines (Herzig et al, 2012;Tran and Herzig, 2020)). It can help companies enhance both economic and environmental performance (Guenther et al, 2015;Kokubu and Nakajima, 2004).…”

Applying Material Flow Cost Accounting and Two-Dimensional, Irregularly Shaped Cutting Stock Problems in the Lingerie Manufacturing Industry

“…Then, several studies have adopted MFCA in various case study [17][18][19][20]; moreover, Tran and Herzig [21] provided a review of the existing literature on MFCA application in developing countries. In Thailand, MFCA is a relatively new tool that was only recognized in 2014.…”