Corporate Disclosure Of Environmental Capital Expenditures: A Test Of Alternative Theories
AbstractIn this study, we examine three potential explanations for the corporate choice to disclose environmental capital spending amounts. We investigate, first, whether the disclosure appears to be a function of the materiality of the spending and we find that, for the overwhelming majority of observations, the disclosed amounts are not quantitatively material. This suggests that non-disclosure is likely due to immateriality. We next attempt to differentiate the choice to disclose across voluntary disclosure theory and legitimacy theory arguments. Our findings show that disclosing firms do not exhibit improved subsequent environmental performance relative to non-disclosing companies. Further, controlling for firm size and industry class, we find the choice to disclose is associated with worse environmental performance. Overall, our results suggest that companies use the disclosure of environmental capital spending as a strategic tool to address their exposures to political and regulatory concerns.
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Bibliographic InfoPaper provided by HAL in its series Post-Print with number halshs-00459410.
Date of creation: 2009
Date of revision:
Publication status: Published - Presented, La place de la dimension européenne dans la Comptabilité Contrôle Audit, 2009, Strasbourg, France
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environmental capital expenditure; environmental disclosure; environmental regulation; legitimacy theory; materiality; Toxic Release Inventory; voluntary disclosure theory.;
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