Relationship between Sustainable Disclosure and Performance—An Extension of Ullmann’s Model

María Luisa Pajuelo Moreno and Teresa Duarte-Atoche
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María Luisa Pajuelo Moreno: Department of Accounting, United Arab Emirates University, Abu Dhabi 15551, UAE
Teresa Duarte-Atoche: Department of Accounting and Finance, University of Sevilla, Av. Ramón y Cajal, 1, 41018 Sevilla, Spain

Sustainability, 2019, vol. 11, issue 16, 1-33

Abstract: Due to the lack of consensus on the Sustainable Disclosure (SD)–Sustainable Performance (SP) relationship and the absence of a robust theoretical framework base, this research tests this relationship. Based on Ullmann’s argument that the execution of corporate responsibility regarding SD, SP and EP (economic performance) is determined by the management’s (unobservable) overall strategy, we apply Partial Least Squares, introducing EP, size and membership in sensitive sectors and subjecting them to a multiplicity of external pressures (social, environmental and legislative) as determinants of the SD–SP link. There is a moderate SD–SP relationship, with a significant effect due to EP and conditioned by size. Specifically, (1) the companies that are concerned and which act sustainably have a higher SD, (2) the greater the EP, the greater its effect on this SD, but (3) when the sample is segmented by size, the moderating effect is only positive and significant for large companies. An awareness of the added value of the sustainable business model exists, more than simply reporting (actions beyond words), but the value that its profitability yields will not be determinant for SP, though it will affect SD, despite there being no direct relationship between performance and SD.

Keywords: stakeholders; sustainability performance; sustainability disclosure; PLS (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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