Reporting of environmental policies and internationalization of Asia–Pacific firms: the moderating role of innovation as a source of legitimacy

This study aims to examine whether Asia–Pacific firms use reporting environmental policies to reduce their liability of origin in the international arena. Furthermore, moderating effects of institutional and organizational innovations are captured as sources of legitimacy. A multilevel modeling technique was used to test the hypotheses. The sample was composed of 91 firms from 11 countries in 10 different sectors during the period from 2014 to 2018. Using institutional theory, the results show that the reporting of environmental policies has a significant positive impact on the firms’ scope of internationalization. The results reveal that high institutional innovation has a negative moderating role in the relationship between firms’ reporting of environmental policies and their scope of internationalization. However, it was found that organizational innovation does not exhibit a significant moderating effect on this relationship.