Not Good, Not Bad: The Effect of Family Control on Environmental Performance Disclosure by Business Group Firms

Ann Terlaak (), Seonghoon Kim () and Taewoo Roh ()
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Ann Terlaak: University of Wisconsin-Madison
Seonghoon Kim: University of California - Santa Barbara
Taewoo Roh: Soonchunhyang University

Journal of Business Ethics, 2018, vol. 153, issue 4, No 4, 977-996

Abstract: Abstract We combine research on business groups with the socioemotional wealth approach from family firm research to examine how family control of business group firms affects voluntary disclosure of environmental performance information. Theorizing that disclosing environmental performance information weakens the owning family’s control over its business group firm, but also generates reputational benefits, we expect family ownership and disclosure propensities to relate in a U-shaped way and, further, that this U-shape is accentuated for business group firms with a family CEO. Analysis of longitudinal data on disclosure decisions of South Korean business group firms supports our theory and suggests that the effect of family control on environmental performance disclosure is neither good nor bad; instead, it depends on both the level of family ownership and whether a family CEO is in place. The finding that disclosure propensities are greatest when family control of business group firms is most extensive is provocative: it suggests that the very element that often is seen to encourage inefficiencies and fraud in business groups—family ownership combined with family leadership—can also be leveraged to foster responsible behaviors.

Keywords: Business groups; Corporate social responsibility; Environmental performance disclosure; Family firms; Greenhouse gas emissions (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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DOI: 10.1007/s10551-018-3911-5

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