Rutgers Business School, New Brunswick

How Firm Innovation Orientation Impacts Environmental Disclosure and Actions

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ABSTRACT

While previous research has identified both external and internal factors associated with companies’ voluntarily disclosure, disclosure quality, and environmental performance, there remains uncertainty as to the conditions under which a specific company's actions will be symbolic or representative of substantive effort. This paper considers the organizational characteristic of Innovation Orientation as a potential factor that impacts a firm's environmental disclosure and actions. As supported by the behavioral theory of the firm, I propose that higher Innovation-Oriented companies will have more substantive potential solution available “at hand” to address environmental problems. I utilize textual analysis and semi-supervised machine learning to measure Innovation Orientation from company documents, and demonstrates that companies with higher Innovation Orientation have more transparent disclosure and higher quality action. This paper contributes to the understanding of an organizational characteristic that explains companies’ variable response to stakeholder pressure or desire to signal the market with disclosure and action.

BIOGRAPHY

Renée Cornell is a third-year Ph.D. candidate in the Doctoral Program at the Rutgers Business School. Her research focus is on organizational characteristics that impact corporate sustainability and the strategic choices companies make to implement substantive or symbolic environmental action and disclosure. She is particularly interested in textual analysis and machine learning methods to measure intangible organizational characteristics, such as innovation orientation and environmental risk aversion, from company documents. Renée is also a part-time instructor at the Rutgers Business School, teaching a senior level capstone strategy course. Prior to pursuing her Ph.D., Renée had an extensive career in product development and marketing in both the medical device and telecommunications industries. Her experience developing product strategies and navigating complex organizations informs her research and her teaching.