Multinational corporations' corporate social and environmental disclosures (CSED) on web sites

• Published in: International journal of commerce and management Vol. 19; no. 1; pp. 27 - 44
• Main Authors: Lal Joshi, Prem, Gao, Simon S
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Group Publishing Limited 13-03-2009; Emerald Group Publishing, Ltd
• Subjects: Analysis; Annual reports; Communication; Disclosure; Disclosure of information; Discriminant analysis; Financial reporting; Information management; International business enterprises; Internet; Legitimacy; Management; Multinational corporations; Printed materials; Social responsibility; Stakeholders; Studies; Websites; United States; Multinational companies; Internet; Information disclosure; Financial reporting; Corporate governance
• ISSN: 1056-9219; 2059-6014; 1758-8529; 2059-6022
• DOI: 10.1108/10569210910939654

Purpose - The purpose of this paper is to investigate multinational corporations' (MNCs) voluntary practice of including corporate social and environmental disclosure (CSED) on their web sites and characteristics that inspire MNCs to be more accountable in this regard.Design methodology approach - This study adopts discrimination analysis to test six hypotheses to determine which variables influence the MNCs to post their CSED on the web sites. Data from a sample of 49 MNCs were analyzed with STATISTICA. The independent variables tested include log of total assets (size) and log of total equity (size), return on assets (profitability), debt ratio (risk), auditor (Big4 and non-Big4), country effect (origin the USA or non-USA) and industry effect (manufacturing versus services).Findings - The results show that companies with a strong equity base and in a good financial condition have a propensity to voluntarily disclose more environmental information. For social disclosure, company size and the profitability discriminate the most. MNCs disclose a number of items pertaining to the two areas. These results are in line with evidence found in some prior studies.Research limitations implications - This study has its limitations. First, the results would be more conclusive if more companies had been included in the sample. Second, only six variables are tested and there may be scope for explaining the extent of the internet disclosure using other variables. Third, this research does not look into the quality of CSRD.Practical implications - This study provides an empirical analysis of practices and characteristics of MNCs relating to CSRD on their web sites. The findings from this study help understand MNCs' corporate behavior in terms of CSED.Originality value - This study has, for the first time, included three more variables (financial risk, profitability, and country effect) to investigate the disclosure of social and environmental information by MNCs through their web sites, on which there is limited evidence.