The Relations Among Environmental Disclosure, Environmental Performance, and Economic Performance: A Simultaneous Equations Approach
King Fahd University of Petroleum and Minerals - Department of Accounting and Management Info Systems
Theodore E. Christensen
University of Georgia
K.E. Hughes II
Louisiana State University, Baton Rouge - E.J. Ourso College of Business Administration
This study provides an integrated analysis of the interrelations among (1) environmental disclosure, (2) environmental performance, and (3) economic performance. Based on the argument that management's (unobservable) overall strategy affects each of these corporate responsibilities, we conjecture that prior literature's mixed results describing their interrelations may be attributable to the fact that researchers have not considered these functions to be jointly determined. After endogenizing these corporate functions in simultaneous equations models, we obtain results that suggest "good" environmental performance is significantly associated with "good" economic performance, and also with more extensive quantifiable environmental disclosures of specific pollution measures and occurrences.
Number of Pages in PDF File: 39
Keywords: Environmental Performance, Environmental Disclosure, Simultaneous Equations Models
JEL Classification: G12, M41, M45
Date posted: July 16, 2003
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