Some determinants of social and environmental disclosures in New Zealand companies

TLDR

The study replicates and extends a recent US study (Patten, 1991). The authors aim to provide an up‑to‑date description of New Zealand companies’ social and environmental disclosure practices, place them in an international context, and examine potential determinants. They improve upon Patten’s methodology by measuring disclosure as a continuous variable using both page amount and sentence count. Reports that New Zealand companies’ social and environmental disclosures are highly correlated with both page and sentence measures, and that company size and industry significantly influence disclosure levels, while profitability does not, with dual overseas listings associated with greater disclosure.

Abstract

Reports the results of a study on the social and environmental disclosure practices of New Zealand companies. In addition to providing an up‐to‐date description of such practices, and placing them in an international context, examines some potential determinants of these practices. Replicates and extends a recent US study (Patten, 1991). Makes improvements on Patten’s study by measuring the amount of disclosure as a continuous variable using both page amount and the number of sentences. The results indicate both measures are highly correlated. Consistent with Patten (1991) and other studies, reports that both company size and industry are significantly associated with social and environmental disclosures, and that profitability (both current and lagged) is not. In addition to these variables, provides some tentative evidence that New Zealand companies with dual (overseas) stock exchange listings are greater disclosers of social and environmental information.