Does National Culture Affect Attitudes toward Environment Friendly Practices

In this chapter we study empirically the influence of national culture on firm-level attitudes toward environment friendly practices. We hypothesize that cultural differences across countries are significant determinants in explaining cross-country differences in firm-level environmental performance. For example, people in countries with a high uncertainty avoidance score will take steps to minimize environmental spillovers/pollution from the firm's operations that may result in high fines or penalties. Similarly, people in countries with a long-term orientation will be more inclined to engage in environment friendly practices. To test our hypothesis we base measures of cultural dimension factors on Hofstede et al. (2010). We find statistically significant relationships between corporate environmental performance and Hofstede, Hofstede, and Minkov's dimensions of culture. For Power Distance and Masculinity versus Femininity, the relationship is negative, while for Individualism versus Collectivism, Uncertainty Avoidance, Long-Term Orientation versus Short-Term Normative Orientation, and Indulgence versus Restraint the relationship is positive. We conclude that national cultural variations are significant in determining firm-level corporate environmental performance.