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National culture and firm-level carbon emissions: a global perspective

Sohanur Rahman (School of Accountancy, Queensland University of Technology, Brisbane, Australia and Department of Accounting and Finance, North South University, Dhaka, Bangladesh)
Md Nurul Kabir (Department of Accounting and Finance, North South University, Dhaka, Bangladesh)
Kamrul Huda Talukdar (Department of Finance, University of Central Florida, Orlando, Florida, USA and Department of Accounting and Finance, North South University, Dhaka, Bangladesh)
Mumtaheena Anwar (School of Accountancy, Queensland University of Technology, Brisbane, Australia)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 5 January 2023

Issue publication date: 26 January 2023

101

Abstract

Purpose

This study aims to examine the association between national culture and corporate carbon emissions. Specifically, the research explores how firm-level carbon emissions are associated with Hofstede’s four cultural dimensions: power distance, individualism/collectivism, masculinity/femininity and uncertainty avoidance.

Design/methodology/approach

The study examines 36,945 firm-year observations across 39 countries and uses panel regressions to assess the association between firm-level carbon emissions and national culture. This research also uses instrumental variable regression to address the potential endogeneity issues. Alternative proxies for culture are used to test the sensitivity of the findings.

Findings

The findings of this study reveal that power distance and uncertainty avoidance are negatively while individualism and masculinity are positively associated with corporate carbon emissions. The results are robust to the instrumental regressions and alternative measures of culture.

Practical implications

For policymakers, this research highlights the importance of national culture in assessing the efficacy of potential emissions reduction policies, identifying the possible challenges posed by the cultural differences of the targeted groups and designing policy adjustments accordingly. The local culture in which the branches of multinational corporations operate should be considered when the management implements emissions reduction policies for the business units in diverse cultural settings.

Social implications

Aligning emissions reduction policies with regional cultural dimensions has the potential to enhance the effectiveness of corporate and national emissions reduction policies, which can contribute to mitigating global climate change adversities.

Originality/value

This study provides insights into firm-level carbon emissions and Hofstede’s four cultural dimensions in a global setting.

Keywords

Acknowledgements

The authors would like to thank the Editor-in-Chief, Carol Adams, and the Associate Editor involved in the publication process. The authors would also like to thank anonymous reviewers for their valuable contribution in providing suggestions for improving the study. The financial support from North South University under the grant of CTRG-20/SBE/20 is gratefully acknowledged.

Citation

Rahman, S., Kabir, M.N., Talukdar, K.H. and Anwar, M. (2023), "National culture and firm-level carbon emissions: a global perspective", Sustainability Accounting, Management and Policy Journal, Vol. 14 No. 1, pp. 154-183. https://doi.org/10.1108/SAMPJ-05-2022-0228

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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