Internationalization and Environmental Disclosure: The Role of Home and Host Institutions

Multinational Business Review, Vol. 21, No. 1, 2013, pp. 87-114

26 Pages Posted: 15 Apr 2013

See all articles by Ans Kolk

Ans Kolk

University of Amsterdam Business School

Fabienne Fortanier

University of Amsterdam Business School

Date Written: April 11, 2013

Abstract

Purpose – The domestic institutional context has emerged as a key determinant of firms’ environmental disclosure, but studies have hardly addressed the extent to which exposure to foreign institutional contexts plays a role in the occurrence and contents of non-financial disclosure, crucial aspects for understanding multinationals’ accountability. This article therefore investigates the relationship between internationalization (both degree and spread) and environmental disclosure.

Design/methodology/approach – It is hypothesized that both home and host country institutional pressures affect the relationship between internationalization and environmental disclosure, and that effects are more prominent in environmentally-sensitive sectors. The proposed relationships are tested using data from the Fortune Global 250.

Findings – Results show a significantly negative relationship between the degree of internationalization and environmental disclosure, which is only partly mitigated by environmental governance and institutional quality in home and host countries. Only for firms in high-sensitivity sectors from high-standard countries is the relationship positive. Findings are particularly strong for the degree of internationalization; and non-significant for dispersion/spread.

Originality/value – This article moves beyond the predominant focus on country-of-origin effects by adding exposure to foreign institutional contexts, for which it develops a new indicator. It renews attention to non-financial disclosure, a topic underexposed in the IB literature. Viewed from a broader IB perspective, the article provides an empirical illustration of the effect of home and host institutions on firm strategy, and of the use of different metrics to assess internationalization with divergent results for degree versus spread, as well as for sales versus assets, pointing at areas for further research.

Keywords: Internationalization, environmental reporting, institutions, home/host country, country of origin, multinationality, multinationals, international business

JEL Classification: D21, F23, G38, H79, K32, L1, L2, L5, M1, M14, M49, Q2, Q28

Suggested Citation

Kolk, Ans and Fortanier, Fabienne, Internationalization and Environmental Disclosure: The Role of Home and Host Institutions (April 11, 2013). Multinational Business Review, Vol. 21, No. 1, 2013, pp. 87-114, Available at SSRN: https://ssrn.com/abstract=2249068

Ans Kolk (Contact Author)

University of Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
+31 20 525 4289 (Phone)
+31 20 525 5281 (Fax)

HOME PAGE: http://www.anskolk.eu

Fabienne Fortanier

University of Amsterdam Business School ( email )

Roetersstraat 11
1018 WB Amsterdam, 1018WB
Netherlands
+31 20 525 6140 (Phone)
+31 20 525 5281 (Fax)

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