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: Emerald Group Publishing Limited 13-03-2009
• Subjects: Corporate governance; Financial reporting; Information disclosure; Internet; Multinational companies
• ISSN: 1056-9219
• 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. Designmethodologyapproach 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 nonBig4, country effect origin the USA or nonUSA 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 limitationsimplications 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. Originalityvalue 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.