Influence of country governance factors and national culture on corporate sustainability practice: an inter-Country study

A growing number of studies have investigated organisational-level and sectorial-level determinants of corporate sustainability practice (hereinafter referred to as CSP) such as Board attributes, audit committee meetings, shareholders’ activism, ownership structure and sustainability-linked compensation, and industry type. However, most studies have been conducted at the country level, as there have been calls to conduct an investigation using intercountry evidence; therefore, studies that focus on country-level governance factors affecting CSP are scarce. Against this backdrop, the current study investigates country-level governance factors (i.e., Voice and Accountability; Political Stability and Absence of Violence/Terrorism; Government Effectiveness; Regulatory Quality; Rule of Law; and Control of Corruption) and national culture dimensions proposed by Hofstede (i.e., Power distance; Individualism; Masculinity; Uncertainty avoidance; Long-term orientation; and Indulgence) affecting CSP in an international context of 204 oil and gas firms cutting across 36 countries over a 10-year period (2011–2020). Result from the analysis using multivariate regression, generalised linear models regression and discriminant analysis reveals that the country-level governance factor strongly promoting CSP is the rule of law, whilst four of the national culture factor positively influence on CSP except power distance and masculinity. This current study contributes to knowledge by presenting empirical evidence that country-level and national culture factors affect CSP. The study, thus, argues for the inclusion of country governance factors and cultural dimension that may affect CSP in addition to other well-known factors affecting sustainability practice. The study also adds to literature by providing empirical support for the Hofstede Model on national cultural dimensions affecting accounting and organisational practice.