Institutional Isomorphism And ESG Signalling: A Cross-National Examination Of Strategic Conformity In Sustainability Narratives
DOI:
https://doi.org/10.69980/ajpr.v28i1.442Keywords:
Institutional Isomorphism, ESG Signalling, Strategic Conformity, Sustainability Narratives, Cross-National Comparison, Corporate Governance.Abstract
Environmental, social, and governance (ESG) reporting has gained immense prominence as corporations seek legitimacy within their institutional environments. This paper investigates the role of institutional isomorphism in shaping ESG signalling, specifically how firms in different national contexts conform to ESG expectations. Utilizing institutional theory and signalling theory, this study explores the interplay between coercive, mimetic, and normative pressures in shaping sustainability narratives. We hypothesize that firms across countries adapt their ESG reporting to institutional expectations, which are influenced by the regulatory environment, market maturity, and cultural factors. A comparative analysis of ESG reports from firms in developed and emerging markets reveals that coercive pressures dominate in regions with stringent regulations (e.g., the European Union), while mimetic pressures are more prevalent in less regulated markets (e.g., Asia). The study also finds that normative pressures, driven by global reporting frameworks such as the GRI and TCFD, shape strategic conformity in ESG disclosures. This paper contributes to the understanding of cross-national differences in ESG signalling and offers managerial and policy implications for multinational corporations (MNCs) and regulators.
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