The direct and moderating effects of power distance on carbon transparency: An international investigation of cultural value and corporate social responsibility

Abstract

There are limited studies on the influence of national culture on corporate social responsibility, and thus, the issue is underexplored. Using an international sample, we show that higher power distance decreases corporate carbon transparency. In addition to this direct effect, we find that power distance also plays a moderating role in the relationship between carbon performance and carbon transparency. We report evidence of a negative association between carbon disclosure and carbon performance in our sample firms, which suggests that disclosure is driven by legitimation purposes. Further findings demonstrate that the tendency toward legitimation is more pronounced in countries with high power distance, which implies that a lower concentration of power promotes corporate social responsibility and reduces carbon opaqueness. Overall, our findings significantly enhance understanding of the role of culture in managerial response to climate change. Such an understanding is extremely important because climate change must be managed by people, and people are influenced by the underlying national cultural preference.

Corporate choice of providers of voluntary carbon assurance

“…Thus, we predict that firms in code law systems are under greater stakeholder pressure and are thus more likely to choose an accounting firm. Finally, we use the Luo, 2019; Luo & Tang, 2014b;Luo, Tang, & Peng, 2018). We expect that the proxies for carbon management and dynamic capacity are positively correlated with the choice of technical consulting firms as assurance providers.…”

Business strategy and firm efforts on environmental protection: Evidence from China

“…When competition is intense, engaging in CSR activities may become an important device to signal the unobserved quality of the management team and helps CSR‐conscious firms to gain access to several cheap financial resources (Fernández‐Kranz & Santaló, ). Some studies examine CSR from the perspective of external environments, such as national culture, economic development, market completion, institutional context, global diversification, and pressure (Fernández‐Kranz & Santaló, ; Ferri, Oelze, Habisch, & Molteni, ; Ghosal, ; Luo, Tang, & Peng, ; Li et al, ).…”

Opening up the firm: What explains participation and effort in voluntary carbon disclosure by global businesses? An analysis of internal firm factors and dynamics

“…There exists a sizable literature on the determinants and effects of (voluntary) carbon disclosure by global businesses, which spans public policy, business management, and applied economics (e.g., Ben‐Amar et al, ; Ben‐Amar & Chelli, ; Ben‐Amar & McIlkenny, ; Cotter & Najah, ; Delgado‐Márquez et al, ; Doda et al, ; Freedman & Jaggi, ; Giannarakis, Zafeiriou, & Sariannidis, ; Jira & Toffel, ; Jung et al, ; Kim & Lyon, ; Lemma et al, ; Li et al, ; Luo et al, ; Luo & Tang, ; Matisoff, ; Matisoff, Noonan, & O'Brien, ; Peters & Romi, ; Reid & Toffel, ; Stanny & Ely, ; Tang & Demeritt, ). Sociopolitical, economic, and institutional theories of disclosure serve as the main theoretical anchors of this body of research.…”

“…A rich business management literature examines the drivers of corporate participation in the CDP (Ben-Amar, Chang, & McIlkenny, 2015;Cotter & Najah, 2012;D'Amico, Coluccia, Fontana, & Solimene, 2016;Delgado-Márquez, Pedauga, & Cordón-Pozo, 2017;Freedman & Jaggi, 2011;Jira & Toffel, 2013;Kolk & Pinkse, 2007;Li, Huang, Ren, Chen, & Ning, 2018;Liao, Luo, & Tang, 2015;Luo, Tang, & Peng, 2018;Ott, Schiemann, & Günther, 2017;Peters & Romi, 2014;Reid & Toffel, 2009;Stanny, 2013), and an emerging literature evaluates the effects of voluntary carbon disclosures on financial outcomes and corporations' carbon footprints (Ben-Amar & Chelli, 2018;Doda, Gennaioli, Gouldson, Grover, & Sullivan, 2016;Hassan & Romilly, 2018;Jung, Herbohn, & Clarkson, 2018;Kim & Lyon, 2011;Lee, Park, & Klassen, 2015;Lemma, Feedman, Mlilo, & Park, 2019;Matisoff, 2012;Stanny & Ely, 2008). These literatures by and large underscore external factors, such as supply chain pressures, shareholder actions, and regulatory threats, including the threat of direct economic consequences, as drivers of proactive corporate disclosure of climate change strategies and GHG emissions.…”