MNE Circular Economy Actions and Value: The Role of MNE Perception Management and Climate Change

Le résumé fourni par la source

MNE circular economy (CE) actions have opposing implications for its value. They have potential to build resilience, enable efficiency and generate new revenues, but at the same time necessitate a radical shift by the MNE involving cost pressures and risks, creating a situation of evaluative uncertainty for shareholders. Since MNE CE actions are designed to tackle climate change (CC) challenges, we expect shareholder perceptions about MNE CC exposure to reduce evaluative uncertainty, moderating the relationship between MNE CE actions and value. By drawing on the organizational impression management literature in conjunction with prospect theory, we theorize how the MNE’s proactive or anticipatory impression management associated with its CC exposure, creates an information context for shareholders and tips shareholder perceptions of the balance between benefits and costs of these CE actions, resulting in a positive or negative relationship between MNE CE actions and value. We use soft information from the MNE’s earnings calls to assess shareholder perceptions of MNE CC exposure along three dimensions – regulatory vulnerability, technological opportunity and sentiment. Our results provide support for the moderating effect of shareholder’s perceptions of MNE CC exposure, on the relationship between MNE CE actions and value.

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