Gods Put All Things in Feet? The Duality in Religious Diversity and CSR Disclosure

How does religious diversity in host countries affect the corporate social responsibility (CSR) decoupling between CSR reporting adoption (i.e., the likelihood of issuing CSR reporting) and CSR implementation (i.e., the quality of CSR reporting) of emerging market multinationals (EMMs)? Despite extensive interest in how internationalization affects CSR reporting decoupling, the relationship between religious diversity in host countries and EMMs’ CSR reporting remains largely unexplored. In this study, religious diversity is thought to involve a broad range of CSR expectations that facilitate CSR reporting, but also mix inconsistent standards and expectations that they can’t implement simultaneously. Specifically, we argue that when experienced heightened conflicting religious tension within host countries, EMMs tends to symbolically adopt CSR reporting, but less likely to substantively implement CSR reporting with high quality—a form of CSR “decoupling” that we identify as a convenient arrangement between firms and stakeholders. Furthermore, we argue that internationalization can amplify such dual impacts of religious diversity on the adoption and implementation of CSR reporting, because internationalization enhance the salience of global stakeholders. Empirical testing of the CSR reporting of 619 publicly listed Chinese EMMs in the 2008-2013 period generally provides support for these ideas.