Description:
This study examines the corporate culture outcomes over the Environmental Reputation Risk (ERR). We show that firms with a strong corporate culture are associated with a lower ERR. In particular, the relationship is stronger among corporate cultural values that emphasize innovation, respect, and product and service quality, and it is more significant among firms with higher managerial opportunistic incentives. Moreover, a strong culture is associated with a lower uncertainty in environmental reputation risk and a lower environmental cost. Overall, our results suggest that corporate culture plays a disciplinary role in preventing managers from conducting environmentally irresponsible activities