Internationalization and environmental disclosure: the role of home and host institutions

Abstract

Purpose -The domestic institutional context has emerged as a key determinant of firms' environmental disclosure, but studies have hardly addressed the extent to which exposure to foreign institutional contexts plays a role in the occurrence and contents of non-financial disclosure, crucial aspects for understanding multinationals' accountability. This article therefore investigates the relationship between internationalization (both degree and spread) and environmental disclosure. Design/methodology/approach -It is hypothesized that both home and host country institutional pressures affect the relationship between internationalization and environmental disclosure, and that effects are more prominent in environmentally-sensitive sectors. The proposed relationships are tested using data from the Fortune Global 250. Findings -Results show a significantly negative relationship between the degree of internationalization and environmental disclosure, which is only partly mitigated by environmental governance and institutional quality in home and host countries. Only for firms in high-sensitivity sectors from high-standard countries is the relationship positive. Findings are particularly strong for the degree of internationalization; and non-significant for dispersion/spread. Originality/value -This article moves beyond the predominant focus on country-of-origin effects by adding exposure to foreign institutional contexts, for which it develops a new indicator. It renews attention to non-financial disclosure, a topic underexposed in the IB literature. Viewed from a broader IB perspective, the article provides an empirical illustration of the effect of home and host institutions on firm strategy, and of the use of different metrics to assess internationalization with divergent results for degree versus spread, as well as for sales versus assets, pointing at areas for further research.

Industries Regulation and Firm Environmental Disclosure: A Stakeholders’ Perspective on the Importance of Legitimation and International Activities

“…This study, far from contradicting this view, complements it by investigating how these governmental regulatory pressures affect differently on the basis of the type of sector in which the firm operates. Third, only few empirical studies have focused on analyzing internationalization (degree and spread) as an explanatory factor for environmental disclosure (Kolk & Fortanier, 2013), and we complement prior findings by analyzing the role of the international position.…”

Multinational enterprises and the Sustainable Development Goals: An institutional approach to corporate engagement

“…Internationalisation therefore increases the number and diversity of stakeholder pressures on the firm (Brammer, Pavelin, & Porter, 2006;Sharfman, Shaft, & Tihanyi, 2004), which can be argued to both positively and negatively affect corporate responsiveness (e.g. Kolk & Fortanier, 2013).…”

Determinants of Corporate Social Responsibility Disclosure: An Empirical Study of Polish Listed Companies

“…Kolk and Fortanier [71], analyzed the relationship between internationalization and environmental disclosures. As they point out, theoretically, arguments can be made for it to be both negative and positive.…”

“…However, firms may also link internationalization with detailed and externally verified CSR disclosures, as this will generate benefits such as positive reputation effects, risk reduction, and costs reduction resulting from maintaining and coordinating diverse systems and standards. Kolk and Fortanier [71] argue that the relationship between internationalization and voluntary environmental disclosure is essentially a balancing act between pressures from home and host country environmental institutions. According to them, a few studies on the determinants of voluntary disclosures have included internationalization in their models (i.e., [61,72]) but, generally, as a control variable, with mixed findings.…”