Does Society Trump Trump? Corporate Environmental Disclosure During the Trump Administration
Accounting
Speaker: | Den Patten, Illinois State University |
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Date: | Monday 11 March 2019 |
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Time: | 13:30 - 15:00 |
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Location: | Xfi Seminar Room A |
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Further details
In support of legitimacy theory arguments for corporate social responsibility disclosure, a variety
of prior studies document that either increases or decreases in social and regulatory cost
exposures appear to lead to corresponding changes in the level of information provided.
However, none of these studies investigates a situation where social and regulatory exposure
changes are not in sync, a situation we argue taking place with respect to the Trump presidency
in the United States. Based on a sample of 173 large U.S. firms, we find that environmental
disclosure in standalone CSR reports did not change, on average, from the Pre-Trump (2014-
2015) to the Trump (2017-2018) eras. However, cross sectional analysis indicates differences
across firms. Companies in environmentally sensitive industries showed significant increases in
disclosure while companies headquartered in states strongly supporting Trump in the 2016
election exhibited significant decreases in disclosure relative to other firms. Our results support
legitimacy theory arguments, but illustrate the importance of disentangling potentially competing
effects.