Innovation Workshop

Speaker: Mike Toffel

Topic: The Globalization of Corporate Environmental Transparency

Date/Place/Time: Friday, April 30, 2010 at 1:30PM-2:59PM
LOCATION D313 Anderson School

Despite the increasing prevalence of corporate environmental disclosures, there remains substantial heterogeneity about the extent to which corporations reveal their environmental impacts. In this paper, we explore the sources of this heterogeneity by seeking to identify key country- and organization-level determinants of corporate environmental transparency.  We focus on key institutional features of a company's headquarters country, including the extent to which its government and civil society are connected to globalization and thus global social movements. We also hypothesize that key organizational characteristics, notably firms' size and environmental damage created, will moderate corporate responsiveness to pressures greater transparency. We then look to the legal environment of corporate headquarter countries and argue that the stringency of national environmental laws as well as the laws protecting political and civil rights, required for stakeholder groups to exert influence on corporate behavior, will be associated with greater corporate environmental transparency. Finally, we hypothesize that firms that cross list on foreign stock exchanges, which typically impose greater financial disclosure requirements, will also exhibit greater corporate environmental transparency. We test our hypotheses using a novel panel dataset of 4628 large public companies in many industries headquartered in 44 countries, during 2005-2008. Controlling for a host of organizational, industry, and national characteristics, we find evidence for most of our hypothesized relationships.

Link to paper and abstract: No paper available for this talk