Animal Testing and Legitimization: Evidence of Social Investment and Corporate Disclosure

• Published in: Accounting and the public interest 2007-01, Vol.7 (1), p.93-123
• Main Authors: Savage, Arline, Callaghan, Joseph H.
• Format: Article
• Language: English
• ISSN: 1530-9320; 1530-9320
• DOI: 10.2308/api.2007.7.1.93

Little research has been done concerning the disclosure of animal testing in annual reports. We posit that companies receive pressure from two groups to disclose animal testing practices: social/political activists and financial intermediaries (fund managers). We describe a legitimization framework culminating in corporate social disclosures on animal testing in annual reports and we use legitimacy theory to inform our empirical investigation of animal testing disclosures. The results reveal a significant increase in number and intensity of disclosures over the period considered. These disclosures also reflect a change in the nature of the underlying firm behavior in a manner consistent with legitimacy theory and predictions of our legitimization framework. We find that political/social activists appear to be more effective in their legitimizer role than financial intermediaries. Further, exploratory analyses reveal that some socially-responsible mutual fund managers invested in companies that perform animal testing, despite it allegedly being a screening criterion. In light of these findings, we suggest ways in which animal rights organizations could advocate to further improve corporate behavior with regard to animal testing.