The effect of national culture on corporate green proactivity

Climate change is emerging as a crisis that will wreak catastrophic damage on society. In response, companies are expected to mitigate GHG emissions. The current literature focuses largely on economic and regulatory influences but ignores the effects of informal institutions on corporate response to global warming. This motivates us to examine the impact of culture on corporate green proactivity. We find that the cultural dimensions of masculinity and uncertainty avoidance are barriers to green proactivity and that a U-shape relationship exists between power distance and proactivity. To the best of our knowledge, this paper is the first to document the dynamic influence of national culture on green behavior beyond financial and regulatory determinants. In addition, we use a novel measure, corporate green ranking, instead of carbon disclosure to gauge climate proactivity. The findings provide nuanced understanding of corporate decarbonization efforts and have significant theoretical and practical implications.