Arguably, the corporate social responsibility (CSR) practices of multinational enterprises (MNEs) are influenced by a wide range of both internal and external factors. Perhaps most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. This paper addresses that gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationshipbuilding with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan host institutions.
Purpose This study aims to examine the extent to which corporate governance structures and ownership types are associated with the level of corporate social responsibility disclosures (CSRD) in a developing country. Design/methodology/approach Multiple regression techniques are used to estimate the effect of corporate governance structures and ownership types on CSRD using a sample of Libyan oil and gas companies between 2009 and 2013. Findings First, the study results suggest that although the level of CSRD in Libya is low in comparison to its western counterparts, ownership factors have a significant positive influence on CSRD. Second, the authors find board meetings to have a positive impact on CSRD. However, the authors fail to find any significant effect of board size and presence of corporate social responsibility (CSR) committees on CSRD. Overall, the results support prior theoretical evidence that pressures exerted by the government and external stakeholders have a considerable influence in promoting firm-level CSRD activities, specifically as a legitimising mechanism in fragile states. Research limitations/implications First, this study is based on the annual reports, and it did not examine any other reports or other mass communication mechanism that companies’ management may use to disclose CSR information. Future studies might consider disclosures in other channels, if any, such as the internet, CSR reports, etc. Additionally, this study adopts the neo-institutional theory perspective. Future studies might integrate multi-theoretical lenses to offer a richer basis for understanding and explaining CSRD determinants. Originality/value This study contributes to the literature by first providing additional evidence for existing studies, which suggest that on average, better-governed companies are more liable to follow a more socially responsible agenda than poorly governed companies as a legitimising mechanism in fragile states. Also, this study overcomes a major weakness in existing Libyan studies, which have mainly used descriptive data.
This paper presents the first comprehensive analysis of corporate environmental disclosure in the Arab Middle East and North Africa region. Using a detailed research instrument containing 55 items, content analysis of the annual reports of 180 non-financial companies listed on nine major stock markets was conducted over a 5-year period. The calculation of an unweighted disclosure index indicates that, although the level of disclosure might be considered relatively low by international standards, it varies by country. Perhaps of greater significance for the future of sustainable development in the region, disclosure is shown to have increased significantly over the period [2010][2011][2012][2013][2014]. Further analysis shows that although there are some differences relating to categories of disclosure, this is a region-wide phenomenon not driven by a subset of countries or types of company. This benchmark study provides a systematic picture for policy-makers in the region and, for future researchers, both substantive findings and methodological insight.
This study examines the pressures, barriers and enablers which subsidiaries of multinational companies encounter when engaging in corporate social reporting within a developing country context. The researchers conducted in-depth interviews with eighteen managers across ten subsidiaries in Sri Lanka. The findings show that the subsidiaries are overwhelmingly driven by their need to attain internal legitimacy and conform to formal institutionalised processes for reporting on CSR which act as a barrier against publishing separate social reports in Sri Lanka. The study uncovers a tension between head office reporting requirements and demonstrating accountability for the needs of local stakeholders.
Several studies have found a relationship between corporate social and environmental disclosure and firm value (FV) or accounting profitability. Where environmental disclosure has been the focus, though, only single‐country studies have been published, and most of the previous research concerns the developed world. This study examines the association between corporate environmental disclosure (CED) and FV in the Gulf Cooperation Council (GCC) countries, where CED has been increasing from its previous low base. Findings from a multicountry sample of 500 firm‐year observations using a 55‐item unweighted environmental disclosure index suggest that CED is significantly and positively related to FV as measured by Tobin's Q (TBQ). The relationship is robust to using a weighted version of the disclosure index, individual countries and environmental disclosure subindices. Some evidence of a positive relationship between CED and return on assets is also found, but even where statistically significant, the relationship is much weaker than in the case of TBQ. For empirical and theoretical reasons, we recommend that future studies pay greater attention to market‐based proxies, if possible, when investigating the value relevance of CED in both developed and developing countries. Our results suggest that both managers and policymakers in GCC countries should take a positive view of expanded CED.
PurposeThis study explores the levels of and trends in corporate environmental disclosure (CED) among a sample of Sri Lankan listed companies from 2015 to 2019. Furthermore, this article examines the firm-level determinants of CED, including corporate governance (CG) mechanisms, in Sri Lanka from a multi-theoretical perspective.Design/methodology/approachUsing a sample of 205 firm-year observations, this paper distinctively applies a panel quantile regression (PQR) model to examine the determinants of CED in Sri Lanka. This method was supported by estimating a two-step generalized method of moment (GMM) model to tackle any possible existence of endogeneity concerns.FindingsThe authors’ findings indicate an increasing trend in CED practice among the sampled companies (i.e. 41 firms, the only adopters of the GRI framework) in Sri Lanka from 2015 to 2019. However, it is still considered at an early stage compared with other developed counterparts. Furthermore, this study suggests that board size, board independence, board meetings, industry type, profitability and firm size are positively associated with CED level. In contrast, and consistent with our expectation, CEO duality is negatively attributed to the disclosed amount of environmental information in the Sri Lankan context.Research limitations/implicationsThe authors’ empirical evidence reiterates the crucial need to propagate and promote further substantive CG reforms, mandating CED in Sri Lanka.Originality/valueThe authors’ findings provide much-needed insights for indigenous companies, operating across similar emerging economies, to understand how CED can be incorporated into their reporting process based on the GRI framework in order to enhance their firm value, reduce legitimacy gaps and mitigate other operational risks.
There is a resurgence in responsible management education, with business schools' considering its adoption as vital for business courses. Nevertheless, initiating institution-wide changes for responsible management education is an inherently complex activity in business schools, requiring not only revisions in their curriculum, but also sustained faculty and institutional support. This paper explores this complexity in one UK business school, a signatory to the Principles of Responsible Management Education, who have commenced a programme of change in RME. Based on primary data obtained from two workshops with the business schools' faculty, a student survey and a systematic analysis of the curriculum of four undergraduate degrees and two postgraduate degrees, we find that misalignment between faculty skills and institutional bureaucracy, together with an inconsistent focus on responsible management across the curriculum raises key challenges for its adoption. We extend the premise that significant change in RME, requires fundamental changes of a business school's own ethos of what responsibility means to itself.
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