International Journal of Social Science & Economic Research
Submit Paper

Title:
Impact of Legitimacy Sources on Sustainability Disclosure

Authors:
Kamal Krishna Sharma and Sanjay Kumar

Journal: International Journal of Social Science and Economic Research (IJSSER)
ISSN: 2455-8834
Volume: 10
Issue: 10
Publication Date: October 2025
DOI: 10.46609/IJSSER.2025.v10i10.052

|| ||

Kamal Krishna Sharma1 and Sanjay Kumar2
1. Research Scholar – Finance area, Department of Management, Central University of Rajasthan, NH-8, Bandar Sindri, Dist.- Ajmer – 305817, Rajasthan, India.
ORCID: 0000-0003-2259-5650
2. Assistant Professor of Finance, Department of Management, Central University of Rajasthan, NH-8, Bandar Sindri, Dist.- Ajmer – 305817, Rajasthan, India.
ORCID: 0000-0002-5636-1556

MLA 8
Sharma, Kamal Krishna, and Sanjay Kumar. "Impact of Legitimacy Sources on Sustainability Disclosure." Int. j. of Social Science and Economic Research, vol. 10, no. 10, Oct. 2025, pp. 5354-5378, doi.org/10.46609/IJSSER.2025.v10i10.052. Accessed Oct. 2025.
APA 6
Sharma, K., & Kumar, S. (2025, October). Impact of Legitimacy Sources on Sustainability Disclosure. Int. j. of Social Science and Economic Research, 10(10), 5354-5378. Retrieved from https://doi.org/10.46609/IJSSER.2025.v10i10.052
Chicago
Sharma, Kamal Krishna, and Sanjay Kumar. "Impact of Legitimacy Sources on Sustainability Disclosure." Int. j. of Social Science and Economic Research 10, no. 10 (October 2025), 5354-5378. Accessed October, 2025. https://doi.org/10.46609/IJSSER.2025.v10i10.052.

References
Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach. Accounting, Organizations and Society, 29(5–6), 447–471. https://doi.org/10.1016/S0361-3682(03)00032-1
[2] . Aragón-correa, J. A., Marcus, A., & Hurtado-Torres, N. (2016). The Natural Environmental Strategies of International Firms: Old Controversies and New Evidence on Performance and Disclosure. Academy of Management Perspectives, 30(1), 24–39. https://doi.org/http://dx.doi.org/10.5465/amp.2014.0043
[3] . Archel, P., Husillos, J., Larrinaga, C., & Spence, C. (2009). Social disclosure, legitimacy theory and the role of the state. Accounting, Auditing & Accountability Journal, 22(8), 1284–1307. https://doi.org/10.1108/09513570910999319
[4] . Arias, E. (2019). How Does Media Influence Social Norms? Experimental Evidence on the Role of Common Knowledge. Political Science Research and Methods, 7(3), 561–578. https://doi.org/10.1017/psrm.2018.1
[5] . Attig, N., Boubakri, N., El Ghoul, S., & Guedhami, O. (2016). Firm Internationalization and Corporate Social Responsibility. Journal of Business Ethics, 134(2), 171–197. https://doi.org/10.1007/s10551-014-2410-6
[6] . Bansal, P., & Clelland, I. (2004). Talking Trash?: Legitimacy , Impression Management , and Unsystematic Risk in the Context of the Natural Environment Author ( s ): Pratima Bansal and Iain Clelland Source?: The Academy of Management Journal , Feb ., 2004 , Vol . 47 , No . 1 ( Feb ., 2004. Academy of Management Journal, 47(1), 93–103.
[7] . Boiral, O. (2013). Sustainability reports as simulacra? A counter-account of A and A+ GRI reports. Accounting, Auditing & Accountability Journal, 26(7), 1036–1071. https://doi.org/10.1108/AAAJ-04-2012-00998
[8] . Brammer, S., & Pavelin, S. (2006). Voluntary environmental disclosures by large UK companies. Journal of Business Finance and Accounting, 33(7–8), 1168–1188. https://doi.org/10.1111/j.1468-5957.2006.00598.x
[9] . Chin, M. K., Hambrick, D. C., & Treviño, L. K. (2013). Political Ideologies of CEOs: The Influence of Executives’ Values on Corporate Social Responsibility. Administrative Science Quarterly, 58(2), 197–232. https://doi.org/10.1177/0001839213486984
[10] . Cho, C. H., & Patten, D. M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32(7–8), 639–647. https://doi.org/10.1016/j.aos.2006.09.009
[11] . Clarkson, P. M., Overell, M. B., & Chapple, L. (2011). Environmental Reporting and its Relation to Corporate Environmental Performance. Abacus, 47(1), 27–60. https://doi.org/10.1111/j.1467-6281.2011.00330.x
[12] . Cormier, D., & Gomez-Gutierrez, L. (2018). On the search for mimetic patterns in environmental disclosure: an international perspective. International Journal of Sustainable Development and World Ecology, 25(7), 655–671. https://doi.org/10.1080/13504509.2018.1439849
[13] . Cormier, Denis, & Magnan, M. (2007). The revisited contribution of environmental reporting to investors’ valuation of a firm’s earnings: An international perspective. Ecological Economics, 62(3–4), 613–626. https://doi.org/10.1016/j.ecolecon.2006.07.030
[14] . Cubilla-Montilla, M. I., Galindo-Villardón, P., Nieto-Librero, A. B., Vicente Galindo, M. P., & García-Sánchez, I. M. (2020). What companies do not disclose about their environmental policy and what institutional pressures may do to respect. Corporate Social Responsibility and Environmental Management, 27(3), 1181–1197. https://doi.org/10.1002/csr.1874
[15] . DasGupta, R. (2021). Financial performance shortfall, ESG controversies, and ESG performance: Evidence from firms around the world. Finance Research Letters, July, 102487. https://doi.org/10.1016/j.frl.2021.102487
[16] . Deegan, C. (2002). Introduction: The legitimising effect of social and environmental disclosures – a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311. https://doi.org/10.1108/09513570210435852
[17] . Depoers, F., & Jérôme, T. (2020). Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure: The case of the tax reconciliation. Journal of Applied Accounting Research, 21(1), 90–105. https://doi.org/10.1108/JAAR-04-2018-0048
[18] . DiMaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited?: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48(2), 147–160.
[19] . El Ghoul, S., Guedhami, O., & Kim, Y. (2017). Country-level institutions, firm value, and the role of corporate social responsibility initiatives. Journal of International Business Studies, 48(3), 360–385. https://doi.org/10.1057/jibs.2016.4
[20] . El Ghoul, S., Guedhami, O., Nash, R., & Patel, A. (2019). New Evidence on the Role of the Media in Corporate Social Responsibility. Journal of Business Ethics, 154(4), 1051–1079. https://doi.org/10.1007/s10551-016-3354-9
[21] . Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38, 45–64. https://doi.org/10.1016/j.gfj.2017.03.001
[22] . Fernandez-Feijoo, B., Romero, S., & Ruiz, S. (2014). Effect of Stakeholders’ Pressure on Transparency of Sustainability Reports within the GRI Framework. Journal of Business Ethics, 122(1), 53–63. https://doi.org/10.1007/s10551-013-1748-5
[23] . Gallo, P. J., & Christensen, L. J. (2011). Firm size matters: An empirical investigation of organizational size and ownership on sustainability-related behaviors. Business and Society, 50(2), 315–349. https://doi.org/10.1177/0007650311398784
[24] . Gamerschlag, R., Moller, K., & Verbeeten, F. (2011). Determinants of voluntary CSR disclosure?: empirical evidence from Germany. Review of Managerial Science, 5, 233–262. https://doi.org/10.1007/s11846-010-0052-3
[25] . Giannarakis, G. (2014). Corporate governance and financial characteristic effects on the extent of corporate social responsibility disclosure. Social Responsibility Journal, 10(4), 569–590. https://doi.org/10.1108/SRJ-02-2013-0008
[26] . Gujarati, D. N. (2004). Basic Econometrics. In McGraw-Hill Companies. https://doi.org/10.1126/science.1186874
[27] . Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting: A review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5–21. https://doi.org/10.1016/j.jclepro.2013.07.005
[28] . Hahn, R., Reimsbach, D., Kotzian, P., Feder, M., & Weißenberger, B. E. (2021). Legitimation Strategies as Valuable Signals in Nonfinancial Reporting? Effects on Investor Decision-Making. In Business and Society (Vol. 60, Issue 4). https://doi.org/10.1177/0007650319872495
[29] . Hrasky, S. (2012). Carbon footprints and legitimation strategies: Symbolism or action? Accounting, Auditing and Accountability Journal, 25(1), 174–198. https://doi.org/10.1108/09513571211191798
[30] . Hu, M., & Loh, L. (2018). Board governance and sustainability disclosure: A cross-sectional study of Singapore-listed companies. Sustainability (Switzerland), 10(7). https://doi.org/10.3390/su10072578
[31] . Karaman, A. S., Kilic, M., & Uyar, A. (2018). Sustainability reporting in the aviation industry: worldwide evidence. Sustainability Accounting, Management and Policy Journal, 9(4), 362–391. https://doi.org/10.1108/SAMPJ-12-2017-0150
[32] . Kim, E. H., & Lyon, T. P. (2015). Greenwash vs. Brownwash: Exaggeration and undue modesty in corporate sustainability disclosure. Organization Science, 26(3), 705–723. https://doi.org/10.1287/orsc.2014.0949
[33] . Kouloukoui, D., Sant’Anna, Â. M. O., da Silva Gomes, S. M., de Oliveira Marinho, M. M., de Jong, P., Kiperstok, A., & Torres, E. A. (2019). Factors influencing the level of environmental disclosures in sustainability reports: Case of climate risk disclosure by Brazilian companies. Corporate Social Responsibility and Environmental Management, 26(4), 791–804. https://doi.org/10.1002/csr.1721
[34] . Kumar, K., Kumari, R., Poonia, A., & Kumar, R. (2021). Factors influencing corporate sustainability disclosure practices: empirical evidence from Indian National Stock Exchange. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-01-2021-0023
[35] . Luo, L., Lan, Y. C., & Tang, Q. (2012). Corporate Incentives to Disclose Carbon Information: Evidence from the CDP Global 500 Report. Journal of International Financial Management and Accounting, 23(2), 93–120. https://doi.org/10.1111/j.1467-646X.2012.01055.x
[36] . Maistriau, A., & Bonardi, J.-P. (2014). How Much Does Negative Public Exposure on Environmental Issues Increase Environmental Performance? Academy of Management Proceedings Supplement, 11328.
[37] . Manchiraju, H., & Rajgopal, S. (2017). Does Corporate Social Responsibility (CSR) Create Shareholder Value? Evidence from the Indian Companies Act 2013. Journal of Accounting Research, 55(5), 1257–1300. https://doi.org/10.1111/1475-679X.12174
[38] . Martínez-Ferrero, J., & García-Sánchez, I. M. (2017). Coercive, normative and mimetic isomorphism as determinants of the voluntary assurance of sustainability reports. International Business Review, 26(1), 102–118. https://doi.org/10.1016/j.ibusrev.2016.05.009
[39] . McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate Social Responsibility and Firm Financial Performance. The Academy of Management Journal, 31(4), 854–872. https://www.jstor.org/stable/256342
[40] . Meyer, J. W., & Rowan, B. (1977). Institutionalized Organizations?: Formal Structure as Myth and Ceremony. American Journal of Sociology, 83(2), 340–363.
[41] . Moseñe, J. A., Burritt, R. L., Sanagustín, M. V., Moneva, J. M., & Tingey-Holyoak, J. (2013). Environmental reporting in the Spanish wind energy sector: An institutional view. Journal of Cleaner Production, 40, 199–211. https://doi.org/10.1016/j.jclepro.2012.08.023
[42] . Nikolaeva, R., & Bicho, M. (2011). The role of institutional and reputational factors in the voluntary adoption of corporate social responsibility reporting standards. Journal of the Academy of Marketing Science, 39(1), 136–157. https://doi.org/10.1007/s11747-010-0214-5
[43] . Nirino, N., Battisti, E., Ferraris, A., Dell’Atti, S., & Briamonte, M. F. (2022). How and when corporate social performance reduces firm risk? The moderating role of corporate governance. Corporate Social Responsibility and Environmental Management, 1–11. https://doi.org/10.1002/csr.2296
[44] . Nuskiya, M. N. F., Ekanayake, A., Beddewela, E., & Meftah Gerged, A. (2021). Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance. Journal of Accounting in Emerging Economies, 11(3), 367–394. https://doi.org/10.1108/JAEE-02-2020-0028
[45] . Orij, R. (2010). Corporate social disclosures in the context of national cultures and stakeholder theory. Accounting, Auditing & Accountability Journal, 23(7), 868–889.
[46] . Patten, D. M. (2002). The relation between environmental performance and environmental disclosure: A research note. Accounting, Organizations and Society, 27(8), 763–773. https://doi.org/10.1016/S0361-3682(02)00028-4
[47] . Posadas, S. C., Ruiz-Blanco, S., Fernandez-Feijoo, B., & Tarquinio, L. (2022). Institutional isomorphism under the test of Non-financial Reporting Directive. Evidence from Italy and Spain. Meditari Accountancy Research, 31(7), 26–48. https://doi.org/10.1108/MEDAR-02-2022-1606
[48] . Scott, W. R. (1995). Institutions and organizations. SAGE Publications, Thousand Oaks. https://doi.org/10.1017/S1352325200000288
[49] . Servaes, H., & Tamayo, A. (2013). The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness. Management Science, 59(3), 1045–1061. https://doi.org/10.13106/jafeb.2021.vol8.no3.0209
[50] . Shabana, K. M., Buchholtz, A. K., & Carroll, A. B. (2017). The Institutionalization of Corporate Social Responsibility Reporting. Business and Society, 56(8), 1107–1135. https://doi.org/10.1177/0007650316628177
[51] . Shankar Shaw, T., Raithatha, M., Krishnan, G. V., & Cordeiro, J. J. (2021). Did mandatory CSR compliance impact accounting Conservatism? Evidence from the Indian Companies Act 2013. Journal of Contemporary Accounting and Economics, 17(3), 100280. https://doi.org/10.1016/j.jcae.2021.100280
[52] . Singh, S., Khare, A., Pandey, S. K., & Sharma, D. P. (2021). Industry and community peers as drivers of corporate social responsibility in India: The contingent role of institutional investors. Journal of Cleaner Production, 295, 126316. https://doi.org/10.1016/j.jclepro.2021.126316
[53] . Wang, H. M. D. (2010). Corporate social performance and financial-based brand equity. Journal of Product and Brand Management, 19(5), 335–345. https://doi.org/10.1108/10610421011068577
[54] . Wang, Z., Hsieh, T. S., & Sarkis, J. (2018). CSR Performance and the Readability of CSR Reports: Too Good to be True? Corporate Social Responsibility and Environmental Management, 25(1), 66–79. https://doi.org/10.1002/csr.1440
[55] . Wang, Z., & Sarkis, J. (2017). Corporate social responsibility governance, outcomes, and financial performance. Journal of Cleaner Production, 162, 1607–1616. https://doi.org/10.1016/j.jclepro.2017.06.142
[56] . Young, S., & Marais, M. (2012). A Multi-level Perspective of CSR Reporting: The Implications of National Institutions and Industry Risk Characteristics. Corporate Governance: An International Review, 20(5), 432–450. https://doi.org/10.1111/j.1467-8683.2012.00926.x
[57] . Zampone, G., Sannino, G., & García-Sánchez, I. M. (2023). Exploring the moderating effects of corporate social responsibility performance under mimetic pressures. An international analysis. Corporate Social Responsibility and Environmental Management, 30(1), 53–65. https://doi.org/10.1002/csr.2338
[58] . Zhang, X., Zhao, X., & Qu, L. (2021). Do green policies catalyze green investment? Evidence from ESG investing developments in China. Economics Letters, 207, 110028. https://doi.org/10.1016/j.econlet.2021.110028
[59] . Zimmerman, M. A., & Zeitz, G. J. (2002). Beyond Survival?: Achieving New Venture Growth by Building Legitimacy. Academy of Management Review, 27(3), 414–431.

ABSTRACT:
Utilizing legitimacy theory, this research investigates the intricate relationship between sustainability disclosure and the acquisition of legitimacy from various sources, specifically regulatory, normative, and cognitive. The study quantifies the regulative, normative, and cognitive dimensions of legitimacy through CSR performance, media exposure, and the mimetic effect, respectively. A two-way fixed effects panel regression analysis is employed to examine the underlying dynamics, utilizing a dataset comprising 1,810 firm-year observations from 243 distinct firms listed on the NIFTY 500 over the period from 2015 to 2022. The findings reveal a non-significant inverse relationship between CSR performance and sustainability disclosure. Conversely, both media exposure and the mimetic effect demonstrate a significant positive correlation with sustainability disclosure. The robustness of our results is confirmed through a series of rigorous tests. This study contributes to the existing body of literature on sustainability disclosure and offers practical implications for organizations and policymakers.

IJSSER is Member of