Legal systems, internationalization and corporate sustainability. An empirical analysis of the influence of national and international authorities
Published date | 02 October 2017 |
Pages | 861-875 |
DOI | https://doi.org/10.1108/CG-08-2016-0169 |
Date | 02 October 2017 |
Author | Jacob Hörisch,Roger Leonard Burritt,Katherine L. Christ,Stefan Schaltegger |
Subject Matter | Strategy,Corporate governance |
Legal systems, internationalization and
corporate sustainability. An empirical
analysis of the influence of national and
international authorities
Jacob Hörisch, Roger Leonard Burritt, Katherine L. Christ and Stefan Schaltegger
Jacob Hörisch is based
at the Centre for
Sustainability
Management, Leuphana
University Luneburg,
Luneberg, Germany.
Roger Leonard Burritt is
Visiting Professor at the
Management in the
International Food
Industry, Universitat
Kassel, Witzenhausen,
Germany.
Katherine L. Christ is
based at the School of
Commerce, the University
of South Australia
Business School,
Adelaide, Australia.
Stefan Schaltegger is
based at Leuphana
University Luneburg,
Luneberg, Germany.
Abstract
Purpose –This paper aims to compare the influence of different legal systems on corporate
sustainability management practices. Against the background of growing internationalization of
business activities, it additionally considers whether internationalization allows companies to
circumvent the influence of national authorities.
Design/methodology/approach –Three legal systems are compared using regression analyses of
more than 200 large corporations in five countries: common law (USA and Australia), German code law
(Germany) and French code law (France and Spain).
Findings –The impact of national and international authorities is found to be strongest in French code
law countries. In addition, the influence of international authorities is stronger for corporations with
higher shares of international sales. For both national and international authorities, the degree of
internationalization is found to moderate the influence of the legal system on corporate sustainability
practices.
Practical implications –The legal system in place influences the relative effectiveness of national and
international authorities over company sustainability practices and needs to be taken into account in
policymaking. To be effective, international authorities need to work with or substitute for national
authorities in promoting corporate sustainability practices in countries depending on their legal
systems.
Originality/value –This research applies and quantitatively tests La Porta’s (1998) framework on legal
systems in the new context of corporate sustainability.
Keywords Internationalization, Corporate sustainability, Sustainability management, Code law,
Common law, Legal system
Paper type Research paper
1. Introduction
The world faces the critical problem of needing to move toward sustainability (UNWCED,
1987). Large corporations are seen as important economic actors with a crucial part to play
in this movement (Whiteman et al., 2013). In any country, there are ways in which corporate
behavior toward implementation of sustainability practices can be influenced by national
regulatory authorities. Governments can also harness non-government entities such as
international standard setters to help enforcement and improve behavior of corporations
(Gunningham, 2015). Regulation, self-regulation, economic incentives, information
strategies and various mixes of these can all be used (Gunningham, 2015;Van Gossum
et al., 2012). However, to date, the influence of different legal systems on the
implementation of corporate sustainability management practices has received little
Received 20 August 2016
Revised 25 April 2017
Accepted 14 May 2017
DOI 10.1108/CG-08-2016-0169 VOL. 17 NO. 5 2017, pp. 861-875, © Emerald Publishing Limited, ISSN 1472-0701 CORPORATE GOVERNANCE PAGE 861
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