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Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing

  • Christopher Marquis

    ()

    (School of Management, Cornell University)

  • Michael W. Toffel

    ()

    (Harvard Business School, Technology and Operations Management Unit)

  • Yanhua Zhou

    ()

    (Harvard Business School)

Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We identify key company- and country-level factors that limit firms' use of selective disclosure by intensifying scrutiny on them and by diffusing global norms to their headquarters countries. We test our hypotheses using a novel panel dataset of 4,750 public companies across many industries and headquartered in 45 countries during 2004-2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to the literature that spans institutional theory and strategic management and to the literature on information disclosure.

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File URL: http://www.hbs.edu/faculty/pages/download.aspx?name=11-115.pdf
File Function: Revised version, 2015
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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 11-115.

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Length: 46 pages
Date of creation: May 2011
Date of revision: Jul 2015
Handle: RePEc:hbs:wpaper:11-115
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Web page: http://www.hbs.edu/

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