National Cultural Practice, Diversification Strategies, and CSR Environmental Disclosures

Abstract

This study examines the relationships between market strategies (international and product diversification) and a key pillar of nonmarket strategy, corporate social responsibility (CSR). It focuses on environmental CSR disclosures by MNEs in their annual reports. We rely on Institutional Theory and the Stakeholder perspective to make our arguments. We hypothesize two counter relationships between diversification and environmental CSR disclosures. We also examine the moderating role of an MNE’s home country national culture practices on the diversification – environmental CSR disclosures relationships. The study includes two higher order dimensions of GLOBE cultural practices: Performance Based Culture and Socially Supportive Culture. The sample includes 335 large MNEs from 31 countries then distributed among three CSR regimes: European, Anglo- Saxon, and Asian and emerging markets. Data was collected from publicly available sources from 2010 to 2012. The results show support for the hypothesized relationships between diversification and environmental CSR disclosures and that the direction of the relationship varies by the region of the world. They also provide significant support for the moderating role of national culture.