Forthcoming in Organization Science
46 Pages Posted: 10 May 2011 Last revised: 27 Nov 2015
Date Written: November 23, 2015
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.
Keywords: institutional theory, environmental strategy, stakeholders, information disclosure, non-market strategy
JEL Classification: D82,L15
Suggested Citation: Suggested Citation
Marquis, Christopher and Toffel, Michael W. and Zhou, Yanhua, Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing (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. Available at SSRN: https://ssrn.com/abstract=1836472 or http://dx.doi.org/10.2139/ssrn.1836472