noreen kanwal - Academia.edu (original) (raw)

Papers by noreen kanwal

This study examines the influence of the institutional environment on the voluntary corporate soc... more This study examines the influence of the institutional environment on the voluntary corporate social responsibility information disclosed. We use an index based on Global Reporting Initiative guidelines and categorize countries according to their socioeconomic conditions and cultural, legal and corporate systems. The sample is composed of 1598 international companies from twenty countries for the years 2004–2010. By controlling for companies' activities, size, profitability and growth opportunities, we observe that normative and regula-tive institutional structures have an important impact on corporate transparency. Concretely, firms located in coercive societies, characterized by higher long-term orientation, higher cultural values of collectivist, feminist and uncertainty avoidance and a lower power distance index, are more sensitive to publishing corporate social responsibility reports. Moreover, our analysis suggests the characteristics of the country's system, such as its civil law legal environment, strong law enforcement and ownership concentration, are key elements in the disclosure of relevant and comparable information for stakeholders' decision-making processes. Introduction The past two decades have witnessed a dramatic increase in firms issuing corporate social responsibility (CSR) reports in order to hold themselves accountable to stakeholders — and to society at large — regarding their business' use of natural resources and the social and environmental impacts of their activities. Throughout that time, a great number of studies have focused on analyzing how factors such as size, profitability and the activities of companies influence firms' voluntary disclosure practices. In general, these papers have analyzed corporate information practices in specific countries (e.g., Deegan and Gordon, 1996; Gray et al., 2001; Trotman and Bradley, 1981), but few studies have examined the impact on firms' transparency levels by the environment in which they operate (Riahi-Belkaoui and AlNajjar, 2006; Khanna et al., 2004). Nevertheless, the institutional setting leads to different organizational actions and strategies in order to obtain legitimacy (Scott, 2008). Among previous studies of the effect different institutional factors have on corporate disclosure, Holland and Foo (2003) found that the legal and regulatory frameworks of the UK and the U.S. that regulate environmental activities influence environmental performance and determine the types of disclosures made by firms. Van der Laan Smith et al. (2005) observed that firms from Norway and Denmark — countries characterized by stakeholder orientation (namely, that place higher attention on the rights of interest groups compared with shareholders) and a stronger emphasis on social issues — have higher levels of CSR disclosure (measured by sentence count, word count and page number) in the areas of the environment, human resources, product safety and shareholder rights than firms from the U.S., a country with shareholder orientation. Xiao et al. (2005) found that companies from the UK and Hong Kong differ in the amount, topic, and location of CSR disclosure, and that this is associated with the pressures and demands different stages of social and economic development present in these countries. Specifically, Xiao et al. (2005) observed that several differences exist for three industries — banking, property and utility — as well as for the topics of health and safety, human resources and the environment, although not for the topics of energy, community and fairness. Chen and Bouvain (2009) tested whether membership in the UN Global Compact makes a difference to CSR reporting, and showed that businesses from the U.S., the UK, Australia and Germany vary significantly in the extent to which they promote CSR and the issues they choose to emphasize in their reports. Latteman et al. (2009) observed that Indian firms communicate more CSR than Chinese companies, due to the Indian environment being a rule-based context in which laws, enforcement mechanisms and courts are stronger and more independent of political influence. As a consequence, this generates higher

This study examines the influence of the institutional environment on the voluntary corporate soc... more This study examines the influence of the institutional environment on the voluntary corporate social responsibility information disclosed. We use an index based on Global Reporting Initiative guidelines and categorize countries according to their socioeconomic conditions and cultural, legal and corporate systems. The sample is composed of 1598 international companies from twenty countries for the years 2004–2010. By controlling for companies' activities, size, profitability and growth opportunities, we observe that normative and regula-tive institutional structures have an important impact on corporate transparency. Concretely, firms located in coercive societies, characterized by higher long-term orientation, higher cultural values of collectivist, feminist and uncertainty avoidance and a lower power distance index, are more sensitive to publishing corporate social responsibility reports. Moreover, our analysis suggests the characteristics of the country's system, such as its civil law legal environment, strong law enforcement and ownership concentration, are key elements in the disclosure of relevant and comparable information for stakeholders' decision-making processes. Introduction The past two decades have witnessed a dramatic increase in firms issuing corporate social responsibility (CSR) reports in order to hold themselves accountable to stakeholders — and to society at large — regarding their business' use of natural resources and the social and environmental impacts of their activities. Throughout that time, a great number of studies have focused on analyzing how factors such as size, profitability and the activities of companies influence firms' voluntary disclosure practices. In general, these papers have analyzed corporate information practices in specific countries (e.g., Deegan and Gordon, 1996; Gray et al., 2001; Trotman and Bradley, 1981), but few studies have examined the impact on firms' transparency levels by the environment in which they operate (Riahi-Belkaoui and AlNajjar, 2006; Khanna et al., 2004). Nevertheless, the institutional setting leads to different organizational actions and strategies in order to obtain legitimacy (Scott, 2008). Among previous studies of the effect different institutional factors have on corporate disclosure, Holland and Foo (2003) found that the legal and regulatory frameworks of the UK and the U.S. that regulate environmental activities influence environmental performance and determine the types of disclosures made by firms. Van der Laan Smith et al. (2005) observed that firms from Norway and Denmark — countries characterized by stakeholder orientation (namely, that place higher attention on the rights of interest groups compared with shareholders) and a stronger emphasis on social issues — have higher levels of CSR disclosure (measured by sentence count, word count and page number) in the areas of the environment, human resources, product safety and shareholder rights than firms from the U.S., a country with shareholder orientation. Xiao et al. (2005) found that companies from the UK and Hong Kong differ in the amount, topic, and location of CSR disclosure, and that this is associated with the pressures and demands different stages of social and economic development present in these countries. Specifically, Xiao et al. (2005) observed that several differences exist for three industries — banking, property and utility — as well as for the topics of health and safety, human resources and the environment, although not for the topics of energy, community and fairness. Chen and Bouvain (2009) tested whether membership in the UN Global Compact makes a difference to CSR reporting, and showed that businesses from the U.S., the UK, Australia and Germany vary significantly in the extent to which they promote CSR and the issues they choose to emphasize in their reports. Latteman et al. (2009) observed that Indian firms communicate more CSR than Chinese companies, due to the Indian environment being a rule-based context in which laws, enforcement mechanisms and courts are stronger and more independent of political influence. As a consequence, this generates higher