Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing
Michael W. Toffel
Harvard Business School (HBS) - Technology & Operations Management Unit
April 11, 2014
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, by intensifying scrutiny on firms and diffusing global norms to their headquarters countries, limit firms’ use of selective disclosure. 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 strategyworking papers series
Date posted: May 10, 2011 ; Last revised: April 11, 2014
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