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Environmental Performance and Corporate Disclosure

Authors: Robert W. Ingram; Katherine Beal Frazier;

Environmental Performance and Corporate Disclosure

Abstract

Disclosure of the social consequences of firms' behavior has been proposed in the professional literature (e.g., see Bauer and Fenn [1972], Bauer, Cauthorn and Warner [1975], and Estes [1972]) under the assumption that reliable social responsibility disclosures would prove useful to external users. Recent studies, however, cast doubt concerning the demand for social disclosures (e.g., Buzby and Falk [1979], Opinion Research Corporation [1974], and Duff and Phelps [1976]). These results could reflect either a lack of disclosure quality or the nonrelevance of social disclosures to external users' decision models. This study centers on the first possibility by examining the relationship between measures of firm's environmental performances and the environmental disclosures contained in the firms' annual reports. In the present institutional environment, most social responsibility disclosures are voluntary and unaudited. Few efforts have been made to monitor firms' social activities or to validate their disclosures so that motivation may exist for management to distort voluntary disclosures, to the extent that these disclosures reflect aspects of managements' relative performances. For the disclosures to be useful, there should be a correspondence between the disclosures and actual events. If external users do not perceive this correspondence, they might discount the social responsibility disclosures, which would be consistent with the negative findings cited above. Disclosure quality may be gauged by assessing the relationship between (1) what firms identify as their accomplishments and objectives and (2)

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    selected citations
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    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    425
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 0.1%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Top 0.1%
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
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Powered by OpenAIRE graph
Found an issue? Give us feedback
selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
425
Top 0.1%
Top 0.1%
Average
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