Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing
Michael W. Toffel
Harvard Business School (HBS) - Technology & Operations Management Unit
Harvard Business School
November 23, 2015
Forthcoming in Organization Science
Harvard Business School Organizational Behavior Unit Working Paper No. 11-115
Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 11-115
Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms’ use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004-2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.
Number of Pages in PDF File: 46
Keywords: institutional theory, environmental strategy, stakeholders, information disclosure, non-market strategy
JEL Classification: D82,L15
Date posted: May 10, 2011 ; Last revised: November 27, 2015
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