Quantity versus quality: the impact of environmental disclosures on the reputations of UK Plcs

• Published in: The British accounting review Vol. 37; no. 2; pp. 231 - 248
• Main Authors: Hasseldine, J., Salama, A.I., Toms, J.S.
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.06.2005; Elsevier Science Ltd
• Subjects: Accounting disclosure; Business accounting; Corporate governance; Disclosure; Empirical research; Environment; Environmental accounting; Environmental policy; Financial reporting; Missions reports; Public relations; Quality signalling; R&D; Reputation; Reputations; Research & development; Resource-based view; Signalling; Stakeholder; Studies; United Kingdom; United Kingdom > UK; Accounting disclosure; Environment; Quality signalling; Reputation; Resource-based view
• ISSN: 0890-8389; 1095-8347
• DOI: 10.1016/j.bar.2004.10.003

The theoretical framework of this paper integrates quality-signalling theory and the resource based view of the firm to test the differential effects of the quantity and quality of environmental disclosures on the firm's environmental reputation. Uniquely, the study uses a quality-adjusted method of content analysis, so that sentences are not merely counted but also weighted to reflect their likely significance. Investments in research and development and diversification, as potential methods of enhancing of environmental reputation, are also considered. In doing so the paper complements and extends the work of [Toms, J.S., 2002. Firm resources, quality signals and the determinants of corporate environmental reputation: some UK evidence. British Accounting Review 34 (3), 257–282]. The results confirm the framework and models tested in the original paper on more recent data and also suggest that quality of environmental disclosure rather than mere quantity has a stronger effect on the creation of environmental reputation amongst executive and investor stakeholder groups. Research and development expenditure, and under certain circumstances, diversification, also add to reputation.