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The Relations Among Environmental Disclosure, Environmental Performance, and Economic Performance: A Simultaneous Equations Approach

39 Pages Posted: 16 Jul 2003  

Sulaiman Al-Tuwaijri

King Fahd University of Petroleum and Minerals - Department of Accounting and Management Info Systems

Theodore E. Christensen

University of Georgia - J.M. Tull School of Accounting; University of Georgia

K.E. Hughes II

Louisiana State University, Baton Rouge - E.J. Ourso College of Business Administration

Date Written: April 2003

Abstract

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.

Keywords: Environmental Performance, Environmental Disclosure, Simultaneous Equations Models

JEL Classification: G12, M41, M45

Suggested Citation

Al-Tuwaijri, Sulaiman and Christensen, Theodore E. and Hughes, K.E., The Relations Among Environmental Disclosure, Environmental Performance, and Economic Performance: A Simultaneous Equations Approach (April 2003). Available at SSRN: https://ssrn.com/abstract=405643 or http://dx.doi.org/10.2139/ssrn.405643

Sulaiman A. Al-Tuwaijri

King Fahd University of Petroleum and Minerals - Department of Accounting and Management Info Systems ( email )

Dhahran 31261
Saudi Arabia

Theodore E. Christensen (Contact Author)

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States

University of Georgia ( email )

Athens, GA
United States

K.E. (Skip) Hughes II

Louisiana State University, Baton Rouge - E.J. Ourso College of Business Administration ( email )

Baton Rouge, LA 70803-6308
United States
225-578-6216 (Phone)

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