THE EFFECT OF STAKEHOLDER EXPECTATIONS AND ENVIRONMENTAL PERFORMANCE ON ENVIRONMENTAL DISCLOSURE

This study aims to examine whether stakeholder groups influence the disclosure of firms� environmental information and to analyze the association between firms� environmental performance and their environmental disclosures in European context. The model constructed by Huang and Kung (2010) which investigates the association between stakeholder expectations and corporate environmental disclosure, is replicated. Additionally, this study is extended to an examination of the effect of environmental performance on environmental disclosure. The sample comprised of European firms extracted from the FTSEurofirst 300 Index Constituents. These firms are then narrowed down to four most polluting industrial sectors in Europe (based on European Pollution Release and Transfer Register): energy, production and processing of metals, mineral and mining, and chemical. Results suggest that either stakeholder expectations or environmental performance is related or associated with environmental disclosure