Do global firms increase their environmental disclosure and performance? Symbolic versus effective operations and the moderating role of liability of origin. Legitimation implications

Abstract

This paper analyzes the debate regarding the implications of international firms’ strategies for their environmental approaches across multiple regions by distinguishing between symbolic and effective environmental operations. Furthermore, we extend previous literature by considering the relevant moderating role of a firm’s liability of origin on these relationships. Using panel data of 292 firms in the period from 2011 to 2018 in the energy and utility sectors, our results show that a firm’s progressive globalization increases its environmental disclosure but does not affect its environmental performance. Interestingly, our results demonstrate that a weak institutional home context reinforces a global firm’s interest in gaining legitimation through both its environmental disclosure and performance; however, a strong institutional home context reduces its interest in environmental sources of legitimation. Our results contribute to previous literature on how global firms may gain environmental legitimacy using diverse strategies.