The relationship between Hofsted’s national cultural values and corporate environmental disclosure: an international perspective

Saime Once; Akeel Almogtome
Makale detayları

The relationship between Hofsted’s national cultural values and corporate environmental disclosure: an international perspective

Yazarlar:

Saime Once | Akeel Almogtome

Yayıncı:

PressAcademia

Dergi:

Research Journal of Business and Management 2014 Vol.1 Issue 3, pp.279-304

Belge Tipi:

Makale

Yayın Tarihi:

8/2014

Belge Dili:

Türkçe

Document ID (Org No.):

2000782838

Sıklık:

Üç Aylık

eISSN:

2148-6689

Özet:
 

In   Turkey   and   most   other   countries,   there   are   many   of   organizations   that  have  both  social  and  economic  objectives.  These  organizations  may  include  non-‐profit   organizations,   co-‐operatives,   social   enterprises,   other   for   profit  with   environmental   and   social   obligations,   and   public   sector   organizations.  At  the  same  time  the  countries  around  the  world  became  collectively  dealing  with  environmental  crises  by  formulating  and  enacting  rules  and  regulations  to  sustain  the  environment.  This  paper  involves  a  cross-‐cultural  comparison  of   the   effect   of   national   culture   values   on   corporate   environmental  disclosure   (CED)   within   the   annual   reports   of   sample   consist   of   about   655  large   companies   from   20   countries   based   on   Gray’s   (1988)   classification  methodology   of   cultural   areas.   We   focus   on   the   2012   environmental  disclosures   within   six   industries   are   automobiles,   chemicals,   foods,   metals  and   mining,   oil   and   gas,   and   pulp   and   paper.   In   this   paper   we   utilized   the  content  analysis  technique  which  is  a  research  method  for  making  replicable  and  valid  inferences  from  data  to  operationalize  the  voluntary  environmental  disclosure   variables.   The   findings   indicate   that   two   of   Hofstede’s   national  culture  dimensions  are  linked  to  a  higher  degree  of  corporate  environmental  disclosure.   In   particular,   a   nation’s   high   degree   of   individualism   and   long-‐term  orientation  were  both  related  to  high  level  of  corporate  environmental  disclosure.  While  one  of  Hofstede’s  national  culture  dimensions  is  linked  to  a  low  degree  of  corporate  environmental  disclosure.  The  nation’s  high  degree  of   power   distance   was   related   to   low   degree   of   corporate   environmental  disclosure.   The   control   variables   (regions,   industries   and   firm   size)   were  significantly  related  to  corporate  environmental  disclosure.       1.  INTRODUCTION     The  environmental  accounting  and  reporting  can  be  considered  one  of  the  modern  topics  that   have   entered   to   the   attention   of   companies   and   in   business   sector,   it   indicates  environmental  cost  account  of  any  economical  businesses  of  the  country  or  on  one  region  or  on  the  whole  world,  this  concept  has  been  generated  in  accounting  thought  as  a  result  of  the  perception  of  the  business  organizations  that  its  role  must  not  be  productive,  and  trying  to  gain  profit  only,  but  that  there  is  a  responsibility  and  social  and  environmental  goals   that   should   be   obligated   by   the   industrial   companies   towards   the   society   and   the  environment.  Over  the  past  few  years  researches  in  the  field  of  environmental  accounting  dominate  the  social  accounting  literature,  and  the  predominant  is  represented  by  national  practices   or   regulations   on   environmental   accounting.   Internationally,   there   are   several  Year: 2014 Volume: 1 Issue: 3 nations   that   are   leaders   in   social   and   environmental   reporting   practices.   For   example,  Scandinavian   countries   and   the   Netherlands   have   mandatory   corporate   environmental  performance  reporting  requirements.  In  the  US,  companies  have  to  submit  emissions  data  to   the   Environment   Protection   Authority,   which   is   made   publicly   available.   The   US  Securities   and   Exchange   Commission,   Canada’s   Securities   Commission   and   the   UK  Companies  Act  require  the  disclosure  of  social  and  environmental  information  that  affects  current   or   future   financial   performance.   The   influences   of   culture   are   pervasive   and  underlie   nation’s   institutional   arrangements;   all   organizations   exist   within   cultural  contexts.  Gray  (1988)  hypothesized  that  cultural  values  influence  a  country’s  accounting  system  and  disclosure  practices.     As  a  result,  examining  societal  values  or  culture  would  be  helpful  in  identifying  countries  that  would  have  different  perceptions  of  a  company’s  stakeholders  and  their  influences  on  a  corporation’s  environmental  disclosure  practices.    Therefore,  the  purpose  of  this  paper  is   to   investigate   whether   corporate   environmental   disclosure   levels   relate   to   national  culture   values   depending   upon   Hofstede’s   individualism,   masculinity,   power   distance,  uncertainty   avoidance,   and   long   term-‐orientation   dimensions.   In   ,   this   study  applies   Hofstede’s   cultural   value   theory   to   investigate   cultural   effects   on   Corporate  Environmental   Disclosure   practices.   The   remainder   of   this   paper   covers   the   literature  review,   and   then   the   research   methodology   and   data   analysis   are   presented   and  discussed,  while  the  last  part  discusses  the  findings  and  resulting  conclusions.  2.  LITERATURE  REVIEW  The  literature  review  sheds  light  on  the  variety  of  studies  examining  the  effect  of  cultural  orientation   in   various   accounting   disciplines.   The   results   of   most   empirical   studies  contribute   to   supporting   the   accounting   literatures   related   to   environmental   disclosure  forms,  the  effects  of  the  national  cultural  variations  on  financial  reporting  generally,  and  documenting   the   association   between   the   national   cultural   orientation   and   the  organizations’   attitudes   toward   voluntary   environmental   disclosure,   and   managers’  decision-‐making   with   regard   to   environment   protections   activities.   Many   studies   try   to  investigate  the  factors  affecting  corporate  environmental  disclosures  (e.g.  Bewley  and  Li  (2000),  Liu  and  Anbumozhi  (2009),  Sun  et  al.  (2010)  ,Zhongfu  et  al.  (2011),  De  Villiers  and  Van   Staden   (2012),   and   Bowrin   (2013).   In   this   context,   Bewley   and   Li   (2000)   examine  factors   associated   with   the   environmental   disclosures   in   Canada   from   a   voluntary  disclosure   theory   perspective.   The   authors   measure   environmental   disclosures   by   188  Canadian  manufacturing  firms  in  their  1993  annual  reports  using  the  Wiseman  index.  The  study  finds  that  firms  with  more  news  media  coverage  of  their  environmental  exposure,  higher   pollution   propensity,   and   more   political   exposure   are   more   likely   to   disclose  general   environmental   information,   suggesting   a   negative   association   between  environmental   disclosures   and   environmental   performance.   Liu   and   Anbumozhi   (2009)  identify  the  determinant  factors  affecting  the  disclosure  level  of  corporate  environmental  information   on   the   basis   of   stakeholder   theory,   and   give   an   empirical   observation   on  Chinese  listed  companies.  They  find  that  the  Environmental  Information  Disclosure  (EID)  strategy  of  Chinese  listed  companies  is  oriented  to  fill  up  the  government’s  environmental  concerns   and   the   corporate   EID   effort   is   significantly   associated   with   its   environmental  sensitivity   and   its   size.   While   the   role   of   other   stakeholders,   like   shareholders   and  creditors  in  effecting  the  EID  still  weak.  Sun  et  al.  (2010)  examine  the  association  between  corporate  environmental  disclosure  (CED)  and  earnings  management  (EM)  and  the  impact  of   corporate   governance   (CG)   mechanisms   on   that   association.   They   use   performance-‐matched   discretionary   accrual   (DA)   as   a   measure   of   EM   for   a   sample   of   245   UK   non-‐financial   firms   for   the   financial   year   ended   on   March   2007.   Three   different   theoretical  frameworks   are   used   to   identify   the   expected   association   between   CER   and   EM.   These  include:   signaling,   agency   and   stakeholder-‐legitimacy   theories.   They   find   no   significant  statistical  association  between  various  measures  of  DA  and  environmental  disclosure.  At  the   same   context,   Zhongfu   et   al.   (2011)   find   that   environmental   information   disclosure  has   a   positive   effect   on   economic   performance,   as   is   shown   that   enterprises   which  sufficiently  disclose  their  environmental  information  have  better  economic  performance.  Bowrin  (2013)  finds  that  the  level  of  SED  in  the  Caribbean  was  relatively  and  the  amount  of   SED   was   positively   related   to   firm   size,   industry   affiliation,   foreign   influence   and  organizational  culture.  Other  studies  emphasized  on  the  relation  between  environmental  performance   and   corporate   environmental   disclosure   (e.g.   Hughes   et   al.   (2001),   Patten  (2002),   Al-‐Tuwaijri   et   al.   (2004),   Clarkson   et   al   (2007),   Cho   et   al.   (2010),   and   Iatridis  (2013)),   most   of   these   studies   found   a   positive   relation   between   environmental  performance  and  corporate  environmental  disclosure.    As   discussed   above,   the   environmental   disclosure   has   affected   by   internal   and   external  consequences;   however,   these   studies   contain   implicit   indication   that   there   is   a  differences   in   the   extent   to   which   the   companies   disclose   their   environmental  information,  these  difference  can  be  attributed  to  the  social,  legal,  or  cultural  differences  among   countries.   The   impact   of   national   culture   on   corporate   disclosure   has   received  more  attention  in  the  last  two  decades,  the  national  culture  and  financial  reporting  was  one  of  the  most  important  topics  in  accounting  literature.  In  this  regard,  several  studies  have  explained  the  impact  of  cultural  environments  on  accounting  systems  and  financial  Reporting   (e.g.,   Gray,   1988;   Guthrie   and   Parker,   1990;   Jaggi   and   low,   2000;   Hope   et   al,  2008).   Gray   (1988)   applies   Hofstede’s   cultural   value   dimensions   to   national   accounting  systems   and   practices   presumed   to   reflect   degrees   of   professionalism,   uniformity,  conservatism,  and  secrecy.  Gray’s  framework  proposes  that  cultures’  societal  values  shape  the   values   of   accounting-‐related   professions   (Gray,   1988).   As   such,   accountants’   values  influence  their  judgments  and  decisions  regarding  financial  reporting  systems,  information  disclosure   and   similar   issues,   which   in   turn   influence   national   accounting   systems.  Accordingly,  Gray  (1988)  classified  financial  reporting  based  on  Hofstede’s  national  culture  dimensions.   Even   though   the   Gray’s   classification   has   received   more   attention   in  accounting  literature,  his  attention  still  emphasize  on  the  financial  reporting  rather  than  social  and  environmental  reporting  practices.       However,  several  studies  have  attempted  to  investigate  the  country  effect  by  adopting  a  comparative   framework   in   examining   environmental   disclosure   issues.   These   studies  emphasize  generally  on  the  corporate  social  disclosure  (CSD)  and  suggest  that  CSD  varies  across  countries  but  few  of  the  studies  have  attempted  to  explain  the  underlying  reasons  for  the  observed  variations  in  CSD.       In   this   context,   Buhr   &   Freedman   (2001)   explore   the   role   of   cultural   and   institutional  factors   in   motivating   production   of   mandatory   and   voluntary   disclosure   by   comparing.
Makale detayları

The relationship between Hofsted’s national cultural values and corporate environmental disclosure: an international perspective

Yazarlar: Saime Once | Akeel Almogtome

Yayıncı: PressAcademia

Dergi: Research Journal of Business and Management 2014 Vol.1 Issue 3, pp.279-304

Belge Tipi: Makale

Yayın Tarihi: 8/2014

Belge Dili: Türkçe

Document ID (Org No.): 2000782838

Sıklık: Üç Aylık

eISSN: 2148-6689

Sayı

Yazarlar:

Saime Once | Akeel Almogtome

Yayıncı:

PressAcademia

Dergi:

Research Journal of Business and Management 2014 Vol.1 Issue 3, pp.279-304

Belge Tipi:

Makale

Yayın Tarihi:

8/2014

Belge Dili:

Türkçe

Document ID (Org No.):

2000782838

Sıklık:

Üç Aylık

eISSN:

2148-6689
