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Corporate governance, law, culture, environmental performance and CSR disclosure: A global perspective

Jing Lu and Jun Wang

Journal of International Financial Markets, Institutions and Money, 2021, vol. 70, issue C

Abstract: This paper investigates the impact of corporate governance and culture background on firms’ environmental performance and CSR disclosure from a global perspective. It provides evidence of a positive relationship between environmental performance and CSR disclosure, supporting the voluntary disclosure theory. We find that common internal corporate governance best practices (such as CEO non-duality, ESG committees and gender diversified boards) are associated with better environmental performance and more disclosure of CSR related information. Debt is an effective internal governance vehicle and positively affects firms’ environmental performance and CSR disclosure. Cross-listed firms perform better environmentally and disclose more CSR information. Firms residing in countries with stronger legal systems have less voluntary CSR disclosure, implying that external governance is functional and may partially serve as a substitute for internal governance. In terms of culture influence, we find that firms in countries with low power distance, individualism, femininity, high uncertainty avoidance, and long-term orientation perform better environmentally. Firms in low power distance, collectivistic, feminine, long-term oriented, high uncertainty avoidance and restrained countries disclose more CSR information.

Keywords: Corporate governance; Internationalization; Capital structure; Law; Culture; Environmental performance; CSR disclosure (search for similar items in EconPapers)
JEL-codes: G34 M14 M41 Q56 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (47)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:70:y:2021:i:c:s1042443120301487

DOI: 10.1016/j.intfin.2020.101264

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Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

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