EXPOSURE, LEGITIMACY, AND SOCIAL DISCLOSURE

This study examines whether the voluntary social disclosures included by corporations in their annual reports are related to either public pressure or firm profitability. It is argued that social disclosures are used as a means of addressing the exposure firms face with regard to the social environment, and as such should be related more closely with public-pressure variables than profitability measures. A regression analysis on the level of disclosure for 128 firms in 1985 indicates that size and industry classification are significant explanatory variables whereas a number of profitability variables are not.