How nation-level background governance conditions shape the economic payoffs of corporate environmental performance
Date
2019
Authors
Sandhu, S.
Orlitzky, M.
Louche, C.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Journal article
Citation
Management Decision, 2019; 57(10):2714-2739
Statement of Responsibility
Conference Name
Abstract
Purpose - Companies develop and implement environmental initiatives in particular national governance and institutional contexts. The purpose of this paper is to study how the background governance conditions of legal systems, economic policies and national culture enable or impede the relationship between corporate environmental performance (CEP) and lagged corporate financial performance (CFP).
Design/methodology/approach – This is an empirical study of 427 MNCs headquartered in 22 different countries. The authors merged data from the SiRi database (generally known as Sustain Analytics now),which contains ratings of stakeholder relations for 427 large corporations with publicly available data from Data stream
Findings – Drawing on the new institutionalism in economics and sociology, the authors show that common-law systems and high economic freedom in a company’s home country tend to strengthen the CEP-CFP link. In addition, the home-country cultural variables of uncertainty avoidance, long-term orientation,and (to a lesser extent) masculinity may impede the deployment of CEP for maximum financial gain at the organizational level. The macro level analysis starts to move the field toward an understanding of the particular national governance configurations that provide the most supportive conditions for any CEP-CFP links.
Originality/value – One of the central questions in the field of organizations and the natural environment is about the background conditions that may incentivize and reward firms to be more environmentally responsive. The paper addresses this issue through a nation-level investigation of the background governance conditions that may help or hinder the relationship between CEP and CFP.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
Copyright 2018 emerald Group Publishing