Corporate Governance, Law, Culture, Environmental Performance and CSR Disclosure: A Global Perspective

Lu, J. & Wang, J. (2020). "Corporate Governance, Law, Culture, Environmental Performance and CSR Disclosure: A Global Perspective," Journal of International Financial Markets, Institutions & Money

51 Pages Posted: 18 Nov 2020

See all articles by Jing Lu

Jing Lu

University of Guelph

Jun Wang

University of Western Ontario - DAN Department of Management and Organizational Studies

Date Written: October 1, 2020

Abstract

This paper investigates the impact of corporate governance and culture background on firms’ environmental performance and CSR disclosure from a global perspective. It also provides evidence of a positive relationship between performance and CSR disclosure, supporting the voluntary disclosure theory. We find that common internal corporate governance best practices (such as CEO non-duality, board with ESG committee and gender diversified board) are associated with better environmental performance and more disclosure of CSR related information. Debt is an effective internal governance vehicle and positively affects firms’ environmental performance and CSR disclosure. Cross-listed firms perform better environmentally and disclose more CSR information. Firms residing in countries with stronger legal systems have less voluntary CSR disclosure, implying that external governance is functional and may partially serve as a substitute for internal governance. In terms of culture influence, we find that firms in countries with low power distance, individualism, femininity, high uncertainty avoidance, and long-term orientation perform better environmentally. Firms in low power distance, collectivistic, feminine, long-term oriented, high uncertainty avoidance and restrained countries disclose more CSR information.

Keywords: Corporate Governance; Internationalization; Capital Structure; Law; Culture; Environmental Performance; CSR Disclosure

JEL Classification: G34; M14; M41; Q56

Suggested Citation

Lu, Jing and Wang, Jun, Corporate Governance, Law, Culture, Environmental Performance and CSR Disclosure: A Global Perspective (October 1, 2020). Lu, J. & Wang, J. (2020). "Corporate Governance, Law, Culture, Environmental Performance and CSR Disclosure: A Global Perspective," Journal of International Financial Markets, Institutions & Money, Available at SSRN: https://ssrn.com/abstract=3703229 or http://dx.doi.org/10.2139/ssrn.3703229

Jing Lu (Contact Author)

University of Guelph ( email )

50 Stone Rd E
Guelph, Ontario N1G2W1
Canada

HOME PAGE: http://https://www.uoguelph.ca/lang/people/jing-lu

Jun Wang

University of Western Ontario - DAN Department of Management and Organizational Studies ( email )

Social Science Centre
London, Ontario N6A 5C2
Canada

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