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1. A stakeholder perspective
on mission statements:
an international empirical study
Gertjan van Nimwegen, Laury Bollen, Harold Hassink and
Thomas Thijssens
Faculty of Economics and Business Administration,
Accounting and Information Management, Maastricht University,
Maastricht, The Netherlands
Abstract
Purpose – This study uses a stakeholder perspective to explain the content of mission statements,
in particular the inclusion of stakeholder groups. The study uses stakeholder dependency theory and
resource dependency theory to explain the content of mission statement. In line with this perspective,
stakeholders in this study will be classified as either being resource providers, such as employees and
customers, or non-resource providers, such as the community and the environment. The primary aim
of the study is to find evidence for the theoretical relationship between the importance of stakeholders
to the company and the inclusion of stakeholder groups in the company’s mission statement.
Design/methodology/approach – The use of a large dataset with 490 observations enables a
multivariate analysis of mission statement content, focusing on country-, industry-, and
company-specific factors.
Findings – The study finds that stakeholder groups the company is more dependent on, are
addressed in mission statements more frequently. In addition, the profile of an industry, legal origin
and ownership concentration are found to be related with stakeholder inclusion in mission statements.
Research limitations/implications – The database used adopts a broad definition of a mission
statement, as a result of which the study may also include documents such as vision statements.
Additional factors might exist that could explain the inclusion of stakeholder groups in the mission
statement. For example, Hope states that both legal origin and culture are important in explaining
corporate disclosure. Therefore, literature on cultural dimensions by Hofstede and Schwartz might
also be used as explanatory variables in future research. Finally, additional evidence on the industry
classification developed in this study is required to further substantiate these results.
Practical implications – The observed differences in mission statement content with respect to
stakeholder management signify the fact that the mission statement is not a standardized document
which can simply be ignored by managers. Therefore, managers must be aware of the environment in
which the company is situated, in order to approach the stakeholders which are most important to
the organization. A failure to recognize and include essential stakeholders in the mission statement may
be costly in the long run, particularly when competitors are better able to address these stakeholders.
Originality/value – This study adds to the existing stream of literature on mission statements by
introducing the dependence of the company on the stakeholder as an explanatory factor for the
inclusion of stakeholders in mission statements. Consequently, the study uses stakeholder dependency
theory and resource dependency theory to explain the content of mission statement, rather than
signaling theory. Furthermore, this is one of few empirical studies on mission statements that uses a
large dataset with 490 observations, enabling a multivariate analysis of mission statement content.
Keywords Mission statements, Stakeholder analysis
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1934-8835.htm
The authors would like to thank Sustainable Investment Research International (SiRi) and Dutch
Sustainability Research (DSR) for supplying the data used in this research.
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statements
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International Journal of
Organizational Analysis
Vol. 16 No. 1/2, 2008
pp. 61-82
q Emerald Group Publishing Limited
1934-8835
DOI 10.1108/19348830810915505

2. Introduction
The importance of mission statements and the actual purpose of a mission statement
have been subject to much debate in the academic literature. First of all, some authors
(e.g. Wright, 2002) argue that the mission statement is primarily used as a ‘public
relations statement,’ and therefore mission statements do not reflect reality. However,
authors with a less cynical view to mission statements have primarily identified the
mission statement as a tool for internal purposes, such as the development of
company strategy, providing leadership, and performance evaluation (e.g. Drucker,
1977; Klemm et al., 1991). For example, Drucker stressed the strategic importance of
the company mission (Drucker, 1977, p. 66): “Only a clear definition of the mission and
purpose of the business makes possible clear and realistic business objectives. It is the
foundation for priorities, strategies, plans, and work assignments.” Others have
stressed the importance of mission statements for external communication purposes,
for example to influence the perceptions of stakeholders (e.g. Campbell, 1997;
Bartkus et al., 2000).
To empirically asses the purpose of mission statements, Bart (1997a) and
Leuthesser and Kohli (1997) have studied the inclusion of stakeholder groups in
mission statements and found that some stakeholder groups are mentioned more often
than others. In both studies customers were the most frequently cited stakeholder
group, stressing the external focus of mission statements. Campbell et al. (2001) also
tried to explain the inclusion of stakeholder groups in mission statements. The study
concludes that given the fact that a wide range of stakeholders are mentioned in
mission statements, the purpose of these statements is not limited to internal purposes.
In Campbell et al. (2001) stakeholders were classified as more or less economically
dependent on the company. The results of the study indicate that mission statements
more often refer to economically less-dependent stakeholders. The authors suggest
that “those stakeholders that are less-dependent are those that the organization itself
depends [..] upon” (Campbell et al., 2001, p. 70). The results of the study therefore would
suggest that companies more often address stakeholders which they depend upon.
Building on this suggestion, we argue that it is the economic dependence of the
company on the respective stakeholders rather than the dependence of the stakeholder
on the company, that determines the content of the mission statement.
Therefore, this study adds to the existing stream of literature on mission statements by
introducing the dependence of the company on the stakeholder as an explanatory factor
for the inclusion of stakeholders in mission statements. Consequently, the study uses
stakeholder dependency theory and resource dependency theory to explain the content of
mission statement, rather than signaling theory. Pfeffer and Salancik (1978) have
documented the dependence of the company on others for necessary resources in their
‘resource dependence perspective’. In line with this perspective, stakeholders in this study
will be classified as either being resource providers, such as employees and customers, or
non-resource providers, such as the community and the environment. The primary aim of
the study is to find evidence for the theoretical relationship between the importance of
stakeholders to the company and the inclusion of stakeholder groups in the company’s
mission statement. In addition, country-level factors are introduced as explanatory
variables. Although differencesinmission statement contentbetween countrieshave been
identified by Brabet and Klemm (1994) and Bartkus et al. (2004), the current study is
among the first in the mission statement literature to introduce country-level variables in
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3. order to provide evidence on the role of international differences in mission statements,
based on a multivariate analysis. The mission statement literature has suggested several
other factors which can be used as explanatory variables. Peyrefitte and David (2006)
found similar use of mission statement components across and within four industries.
Literature on corporate social disclosure has classified sectors or industries as high-profile
or low-profile (e.g. Roberts, 1992; Hackston and Milne, 1996). A similar classification will
be used as an explanatory variable in this study. Lastly, company-specific factors such as
company size will be employed in an attempt to isolate the effect of the dependence of
companies on stakeholders as a determinant to the inclusion of stakeholders in mission
statements. The empirical part of the study isbased on a large sample of 490 observations,
using mission statements from companies originating from 22 countries.
The study is organized as follows. Section 2 provides a review of the prior research
on mission statements. In Section 3, the research question and the variables used will
be introduced. Section 4 covers the research design and Section 5 presents the results of
the study. Lastly, Section 6 provides the conclusion, implications, limitations, and
suggestions for future research.
Prior research
Mission statement[1] literature emerged in the 1980s and since than has developed into
four lines of research. The first line of research focuses on the purpose of a company’s
mission statement. The debate over the purpose of the mission statement has been
centered on the question of whether the mission statement is a tool for internal or
external use (Campbell and Yeung, 1991). A number of studies (e.g. Klemm et al., 1991;
Ireland and Hitt, 1992; Mullane, 2002; Brown and Yoshioka, 2003) suggest that a mission
statement is primarily used for internal purposes, but recent mission statement
literature focuses more on its use for external purposes (e.g. Campbell, 1997; Leuthesser
and Kohli, 1997; Bartkus et al., 2002). For example, Bartkus et al. (2000) state that the
mission statement should be a communicational tool that allows current and prospective
stakeholders to determine whether they would like to be involved with the company.
Therefore, the use of the mission statement as an external communication tool seems to
be beneficial to companies. The second line of research focuses on the specific
components included in the mission statement (e.g. David, 1989; Bart, 1996, 1997b, 1998;
Bart and Tabone, 1999; David and David, 2003; Bartkus et al., 2004; Peyrefitte and
David, 2006). For example, analyzing 75 mission statements, David (1989) identified nine
key components: customers, products and services, location, technology, concern for
survival, philosophy, self-concept, concern for public image, and concern for employees.
In a later study, Peyrefitte and David (2006) compared the relevance of these nine key
components within and across the banking, computer hardware, computer software,
and food processing industry, finding similar use of mission statement components
across and within all four industries. The third line of mission statement research
focuses on the relation between the mission statement and financial performance. Want
(1986) depicts this relation by stating that the company mission determines the strategic
business plan, which in turn influences leadership, communication and
decision-making, management control, and the culture in the organization. These last
four factors determine the company’s structure, which in turn influences company
performance. Several authors have attempted to relate the mission statement to financial
performance (e.g. Pearce II and David (1987), Bart and Baetz (1998), Bart et al. (2001),
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4. Omran et al. (2002), Atrill et al. (2005) and Bartkus et al. (2006)). However, these studies do
not provide an overall consistent view. According to Bartkus et al. (2006) potential
explanations for this lack of consistency could be explained by the fact that as an
external communication tool, the mission statement includes current activities, rather
than offering a future direction.
The fourth line of research focuses on the inclusion of stakeholder groups in the
mission statement. Pearce II (1982) notes that companies must recognize and
acknowledge the legitimate claims of stakeholders in defining or redefining the
company mission. Leuthesser and Kohi (1997) examine the content of 63 mission
statements from the Business Week 1000, which contain customers (90.5 percent),
shareholders (60.3 percent), employees (66.7 percent), and suppliers (15.9 percent).
In addition, Bartkus et al. (2004) compare the inclusion of stakeholder groups in mission
statements between Europe, Japan, and the US, observing that on average, Japanese
mission statements less often refer to employees and investors, but more often refer to
society. A potential explanations for the inclusion of stakeholders in mission statements
is based on the involvement of stakeholders in the design of mission statements. Baetz
and Bart (1996) note that all relevant stakeholders should be included in the development
process of the mission statement to safeguard the content on the different stakeholders
and their potentially conflicting interests. On the other hand, Ireland and Hitt (1992)
argue that too large a number or diversity of stakeholders can inhibit a successful
drafting process. As a result, only a limited number of stakeholders may be included in
the drafting process, as a result of which these particular stakeholders may be
mentioned more often in the mission statement. There is not much empirical evidence to
support the assumption that all relevant stakeholders are included in the development
process of mission statements. First, Brabet and Klemm (1994) identified large
international differences between the drafting process of mission statements. For
example, French companies involve parties at all levels of the organization, often also
involving customers and employees, in the drafting process, whereas mission
statements in the UK are more commonly drawn up by managers. As a result, in the UK
there is no link between the role of stakeholders in the drafting process and the inclusion
of stakeholders in the mission statement. Furthermore, Bart (1997a), using a sample of
88 leading North American companies, found that while customers are frequently cited
in mission statements, the group is not often involved in the drafting process.
Campbell et al. (2001) studied the inclusion of stakeholders in mission statements,
looking at sector-specific effects and differences in the dependence of stakeholders to the
company. Stakeholders are defined as less-dependent or more-dependent stakeholders,
depending on their ability to disengage from the company. For example, less-dependent
stakeholders are customers and shareholders, while more-dependent stakeholders are
employees, the community and the environment. Although one of the findings is that
mission statements focus more on less-dependent stakeholders the results on employees
are rather ambiguous, and there seems to be little agreement among the sample
companies as to which of the more-dependent stakeholders should be included in the
mission statement (Campbell et al., 2001, p. 84).
The current study adds to the existing literature on the inclusion of stakeholders in
mission statements by focusing on an alternative theoretical approach. While Campbell
et al. (2001) explain the inclusion of stakeholder groups in mission statements by
looking at the dependence of the stakeholder on the company, the current study will
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5. explain the inclusion of stakeholder groups in mission statements by focusing on the
dependence of the company on these stakeholder groups. The following section will
develop the theoretical approach used in this study in more detail.
Research question
Freeman (1984, p. 46) defines a stakeholder as “. . . any group or individual who can affect
or is affected by the achievement of the organization’s objectives.” While organizations
can be dependent on certain stakeholders for survival, stakeholders can also be dependent
on the organization. Campbell et al. (2001) use the level of economic dependency of
stakeholders on companies to explain the intended audiences of mission statements.
In addition, the authors argue that it is the (economically) less-dependent stakeholders
upon which the company itself is most dependent (Campbell et al., 2001, p. 70). In light of
this argument, the results of the study, which indicate that mission statements more often
refer to less-dependent stakeholders, would thus suggest that companies more often
address stakeholders which they more heavily depend upon. However, Frooman (1999)
has described the various dependency relationships that can exist between a company
and its various stakeholders. One of these dependency relationships is referred to as a
‘firm power resource relationship,’ where the stakeholder is dependent on the company,
but not vice versa. Furthermore, a ‘stakeholder power resource relationship’ exists when
the company is dependent on the stakeholder, but not vice versa. Consequently, both the
firm power resource relationship and the stakeholder power resource relationship do not
fit the above-mentioned suggestion of Campbell et al. (2001).
Pfeffer and Salancik(1978), intheir resource dependency perspective, specificallyfocus
on the dependency of the company on its stakeholders. Pfeffer and Salancik (1978, p. 258)
note that organizations transact with stakeholders for necessary resources, and control
over these resources provides stakeholders with power over the organization. Resource
dependence theory suggests that power accrues to those who control resources needed by
the organization, creating power differentials among parties (Pfeffer, 1981), and it
confirms that the possession of resource power makes a stakeholder important to
managers. Consequently, stakeholders that provide the company with valuable resources
are regarded as more important. Mitchell et al. (1997, p. 854) refer to these stakeholders as
“resource providers to, or dependents of the firm.” Pfeffer and Salancik (1978) and Oliver
(1991) argue that organizations will be less likely to resist pressures from stakeholders
when they are dependent on the resources provided bythose stakeholders.The distinction
between resource providing stakeholders and non-resource providing stakeholders
closely follows the distinction between primary and secondary stakeholders suggested by
Frederick et al. (1988) and Clarkson (1994, 1995), where primary stakeholder group are
those without whose continuing participation the corporation cannot survive as a going
concern. Secondary stakeholder groups are “not engaged in transactions with the
corporation and are not essential for its survival, but may be opposed to the policies or
programs that a corporation has adopted to fulfill its responsibilities to, or satisfy the
needs and expectations of, its primary stakeholder groups” (Clarkson, 1995). According to
Frederick et al. (1988), primary stakeholders include stakeholder groups such as
shareholders, employees, creditors, suppliers, competitors, distributors, etc. Secondary
stakeholders include local communities, governments, foreign governments, social
movements, mass media, general public, etc.
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6. In the current study, the resource dependence theory by Pfeffer and Salancik (1978)
will be used to explain the inclusion of stakeholders in mission statements, making a
distinction between stakeholders which provide resources to the company (resource
providers) and stakeholders which are merely dependent on the actions of the company
(non-resource providers). Due to the relative importance to the company of resource
providers in comparison to non-resource providers, the former is expected to
be included more frequently in mission statements than the latter. Therefore, the
following research question is formulated.
Are resource providing stakeholder groups addressed more frequently
in mission statements in comparison to non-resource providing
stakeholder groups?
The existing literature on mission statements has suggested several other explanatory
variables for the determinants of stakeholder inclusion in mission statements. Brabet and
Klemm (1994) and Bartkus et al. (2004) found that international differences exist in the
contents of mission statements. According to Bartkus et al. (2004), mission statements in
Japan refer to less stakeholder groups in comparison to mission statements in Europe and
the USA. Suggested explanations for the low inclusion of stakeholders in mission
statements in Japan include the reliance on face-to-face communication and the practice of
lifetime employment. From the study by Bartkus et al. (2004) it also becomes clear that
Japanesemission statementslessfrequently refertoresource providers(i.e. employees and
investors), but more frequently refer to non-resource providers (i.e. society) in comparison
to mission statements from Europe and the USA. International differences between
mission statements may be solely dependent on the distinctive characteristics of the
individual countries. However, some countries have commonalities that might also
explain the inclusion of stakeholder groups in mission statements. La Porta et al. (1998)
studied the legal rules covering the protection of shareholders and creditors and the
quality of their enforcement in 49 countries. Countries can be grouped on the basis of their
legal tradition (code law versus common law), legal origin (English, French, German, and
Scandinavian) and ownership concentration of shares, among other factors. Leuz et al.
(2003) have used and adapted some of the variables by La Porta et al. (1997, 1998) to study
the differences in earnings management across 31 countries. We will use some of the
variables employed by Leuz et al. (2003) to test for international differences in mission
statement content. In doing so, we imply that legal factors may influence the inclusion of
resource providers and non-resource providers in mission statements. Although the
resultsofpreviousstudies indicate thatcountry-specific factors may affectthe inclusion of
stakeholder groups in mission statements, so far there is no empirical evidence that the
resource dependency of organizations towards specific stakeholder groups varies over
countries. Therefore, we have no a priori expectation with respect to the role of country
specific factors on the inclusion of stakeholder groups in mission statements.
Second, the industry of the company will be used as an explanatory factor for
stakeholder inclusion. For example, Peyrefitte and David (2006) found similar use of
several mission statement components across and within the banking, computer
hardware, computer software, and food processing industry. Amato and Amato (2002)
analyzed mission statements to find a relationship between commitment to quality of life
and company size, profitability and industry. The results of the study indicate that
companies in the financial services industry are more likely to include social concerns,
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7. whereas companies in the mining, metals and construction industry and light
manufacturing industry are more likely to include ecological concerns. One possible
explanation for the similarity of mission statement content within industries might
be the ‘keeping up with the Joneses’ effect. According to Dimaggio and Powell (1983) the
similarity between organizations is caused by coercive, mimetic, and normative
isomorphism.[2]Coercive isomorphism results from the pressures exerted byother parties
on which the company is dependent and the cultural expectations by society. In addition,
failing to take into account important issues or leaving out important stakeholders in the
mission statement might have adverse consequences for the company if the competition
does otherwise. Then again, according to Urbany (2005), external symbolism might harm
the company inthe long-runifthereisnointernal legitimacy.Thatis, stakeholders willnot
be convinced by a company’s mission of stakeholder orientation, if it is not backed up by
evidence of genuine stakeholder management (e.g. by means of implementation of formal
programs or management systems). This implies that isomorphic behavior within
industries, regarding stakeholder inclusion in missions, will not be acts of pure
symbolism. Further motivation for industry behavior can be drawn from theoretical
insights from other literature, more specifically the literature on corporate social
responsibility (CSR). In CSR disclosure literature, industry is frequently mentioned as a
determinant (for an overview of studies using industry as an explanatory variablefor CSR
disclosure, see Hibbitt, 2004), based on the idea that industries that are more visible will be
more inclined to engage in CSR activities. Similarly, the expectation is that the inclusion of
stakeholders in mission statements is higher in highly visible industries in comparison to
non-visible industries. In addition, visible industries are expected to include more
non-resource providers in comparison to resource providers in mission statements. The
higher level of visibility might increase the need for companies to address the interests of
non-resource providing stakeholders in order to avoid negative publicity.
Third, company-specific factors can be used as explanatory factors for stakeholder
inclusion in mission statements. Toftoy and Chatterjee (2004) surveyed 220 small
businesses in the greater Washington, DC area and found that only 29% of the
companies had a formal mission statement which was accessible to all employees.
Therefore, smaller businesses might be less inclined to use the mission statement to
influence their stakeholders. Larger companies might have more means at their
disposal to take care of the needs of the various stakeholders (e.g. Cormier et al. (2005)),
which might lead to an increase the number of stakeholders addressed in mission
statements. In addition, as discussed in the previous section, larger companies are more
visible to society, which might demand assurances on certain activities. A similar line
of reasoning may be applied to company size, in the sense that a higher level of
visibility might increase the need for companies to address non-resource providing
stakeholders. Therefore, larger companies are expected to include more non-resource
providing stakeholders as opposed to resource providing stakeholders in their mission
statement.
Research design
Dependent variables
The primary research question of this study will be tested using the frequencies of
resource providing stakeholder groups versus non-resource providing stakeholder groups
addressed in mission statements. Therefore, a ratio (FRACTION) is constructed. It is
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8. calculated as the number of resource providing stakeholder groups addressed in the
mission statement divided by the total number of stakeholder groups mentioned in the
mission statement. The interpretation of this variable is that if the fraction is lower than
0.5, the number of resource providing stakeholder groups addressed is lower than the
number of non-resource providing stakeholder groups addressed.[3] In total three
resource providing stakeholders are included (1) employees (EMPLOY), (2) customers
(CUSTOM), and (3) shareholders (GOVERN).[4] Resources are provided to the company
by employees through labor, by customers through consumption and by shareholders
through capital. Also three non-resource providing stakeholders are identified, which
are (1) community (COMMUN), (2) environment (ENVIR), and (3) human rights and
supply chain (HUMAN). The community is represented by people living in the vicinity of
the business activities of the company. The environment is represented by individuals or
organizations which aim to protect the environment from any negative impact of the
business activities of the company. Finally, human rights and supply chain is
represented by NGOs addressing issues such as the working conditions of the
employees or child labor. Whereas an employee can stop working or customers can
refrain from buying goods or services, non-resource providing stakeholders are not able
to exert such power over the organization since they do not controlresources themselves.
In this study, all stakeholders which provide resources to the company (i.e. customers,
employees, and shareholders) are considered as stakeholders on which the company is
dependent. Although it is possible that individual companies are more dependent on a
certain stakeholder than others, for example because in certain instances some
stakeholders might be fairly easy to replace[5], the data used in this study do not allow us
to determine the dependence of individual companies on the resources of individual
stakeholder groups.
Independent variables
Country-specific factors. La Porta et al. (1998) studied the legal rules covering the
protection of shareholders and creditors and the quality of their enforcement in
49 countries. Leuz et al. (2003) have used and adapted some of the variables by La Porta
et al. (1997, 1998) to study the differences in earnings management across 31 countries.[6]
The following variables used by Leuz et al. (2003) will also be used in this study: (1) Legal
Origin, (2) Legal Tradition, (3) Outside Investor Rights, (4) Importance of Equity Market,
and (5) Ownership Concentration.[7] The factor Legal Origin, which contains four
dummy variables, can be either German (LGERMAN), French (LFRENCH), English
(LENGLISH), or Scandinavian (LSCANDI). The Legal Tradition of the country
(LCOMMON) will be a single dummy variable (value ‘0’ for a code-law country, and
value ‘1’ for a common-law country). The third factor, originally called the anti-director
rights index by La Porta et al. (1998), is ‘Outside Investor Rights’ (RIGHTS), being a
measure of the minority shareholder rights in the country. The fourth factor,
‘Importance of Equity Market’ (EQUITYMA), is the average score of three variables in
La Porta et al. (1997).[8] The fifth factor, ‘Ownership Concentration’ (OWNERSHI), is
constructed by La Porta et al. (1998).[9] The last three variables are all scale variables.
Industry factors. Industries are classified based on their visibility. Visibility has
been operationalized in previous studies in various ways. Initial studies attempted to
differentiate between industries by classifying them as either being high-profile or
low-profile (see Roberts (1992) and Hackston and Milne (1996)). More recent CSR
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9. literature suggests that visibility consists of “organizational visibility” as well as
“issue visibility.”
Organizational visibility is high when an organization “can be easily seen by relevant
constituents” (Bowen, 2000, p. 93). A specific instance of “organizational visibility” is
“consumer visibility”, which is based on the idea that some companies are more visible
among (end)consumers whereas others are not. Carter (2006) measures consumer
visibility by interaction with end consumer based on industry SIC code (Carter, 2006),
although she does not provide a ready-to-use industry classification.
Issue visibility is high when issues “are easily noticeable by groups inside or outside
the organization” (Bowen, 2000, p. 93). This measure of visibility builds on the idea that
some companies or industries are more visible due to an inherent impact of their
activities on society. Brammer and Millington (2004) provide a useful classification of
“politically and/or socially sensitive” industries, to account for “industries with
potentially significant environmental or social consequences.” They classify industries
with high environmental impact, large social externalities (alcohol and tobacco) and
industries with ethical issues (pharmaceuticals and defense) as ‘sensitive.’
The measure of visibility used in this study is based on a composite of previous
classifications taking into account both consumer visibility and issue visibility. Next to
the Roberts (1992) and Hackston and Milne (1996) industry classifications, we use
Brammer and Millington (2004) as the basis for our classification. Brammer and
Millington (2004) distinguish between industries with high environmental impact
(chemicals, oil, metal, Pulp and Paper, mining, water and energy production and
distribution), high social impact (tobacco and alcohol), and high ethical concerns
(defense and pharmaceuticals). We have complemented the resulting classification
with a number of industries that that have not been classified by previous studies as
highly visible, yet which industries have faced major controversies regarding social or
ethical issues (Carroll and Buchholtz, 2006). Consequently, we have classified the
household and personal products industries to have high ethical impact (due to animal
rights issues), whereas the food, drug/health care equipment, and automobiles
industries (due to safety issues), the apparel and retail industries (based on human
rights issues such as sweatshops and child labor), and the telecommunication service
industries (due to quality concerns as a result of privatization, see Carroll and
Buchholtz, 2006) were classified as high social impact industries. An industry visibility
measure was created, based on a dichotomous variable, taking the value ‘1’ if an
industry was classified as having high visibility and taking the value ‘0’ otherwise.
Company-specific factors. Company size is calculated as the natural log of the
number of employees (LNEMP), the total assets (LNASSET), the net sales or revenues
(LNSALES), and the market capitalization (LNMCAP).[10]
Sample. From the database we collected data on 630 listed companies in 22 countries.
The largest number of observations in the sample are from the UK (127), the US (100),
Japan (78), Canada (48), Italy (41), France (39), and Switzerland (39).[11] In total
17 companies are eliminated from the data set. These companies are excluded since the
mission statement is not publicly disclosed. The data is retrieved from the 2001-2002
SiRi Global Profiles. The SiRi Global Profiles contain data on various stakeholder issues
per company, grouped under various headings such as community, corporate
governance, customers, employees, the environment and human rights and supply
chain.[12] These headings correspond to the various stakeholder groups identified in
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10. this study. Directly relevant for this study is the identification of specific stakeholder
issue groups as they are addressed in the mission statement for each company.
Empirical results and discussion
Descriptive statistics
Table I contains the descriptive statistics for the independent and dependent variables.
Out of the total sample of 613 companies, 490 companies (80 percent) disclose a mission
statement, 100 companies (16.3 percent) do not disclose a mission statement, and for
23 companies (3.7 percent) the existence of the mission statement cannot be confirmed.
Descriptive statistics of the dependent variable
For the total sample, the descriptive statistics of the dependent variable, FRACTION,
show a minimum value of 0.20 and a maximum value of 0.80. The minimum value of
0.20 relates to companies that only includes stakeholder issue groups in the mission
statement which do not provide resources to the company, such as the environment, the
community and human rights. Alternatively, the maximum value of 0.80 is achieved
when a company only includes stakeholder issue groups that do provide resources to the
company, such as employees, customers, and corporate governance. The mean value of
0.5853 indicates that on average companies address stakeholder issue groups which
provide resources to the company more frequently than stakeholder issue groups that do
not provide resources to the company. The one-sample t-test of FRACTION indicates
that this score is significantly higher than 0.5 at the 0.01 level.
Table II contains the number of stakeholder issue groups addressed by companies in
their mission statement, separated per country and per industry. The variable
FRACTIONis lowestin Japan (0.5136) and highest in Hong Kong/Singapore (0.6423) and
the US (0.6325). Based on a series of one sample t-tests, the finding that FRACTION is
Part A: Continuous variables N Minimum Maximum Mean SD
Dependent variable
FRACTION 490 0.20 0.80 0.5853 0.1169
Independent variables
RIGHTS 486 0 5 3.65 1.5310
EQUITYMA 486 5.0 28.8 19.053 6.8001
OWNERSHI 486 0.012 0.62 0.2668 0.1678
CSRPERF 214 0.29 0.87 0.5563 0.0999
LNEMP 413 2.51 6.14 4.4504 0.6085
LNASSET 420 5.02 9.07 7.1937 0.7358
LNSALES 419 4.97 8.39 6.9305 0.5976
LNMCAP 390 9.85 18.99 16.1046 1.3960
Part B: Dichotomous variables
Value ¼ 0 Value ¼ 1
N Frequency Percentage Frequency Percentage
Independent variables
VISIBLE 490 268 54.7 222 45.3
LGERMAN 490 365 75.1 121 24.9
LFRENCH 490 385 79.2 101 20.8
LENGLISH 490 254 52.3 232 47.7
LSCANDI 490 454 93.4 32 6.6
LCOMMON 490 254 52.3 232 47.7
Table I.
Descriptive statistics
of dependent and
independent variables
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11. Number of resource based
stakeholder groups mentioned
Number of non-resource
based stakeholder groups
mentioned Fraction variable
0 1 2 3 0 1 2 3 Mean SD Min Max N
Full sample 33 103 178 176 155 129 152 54 0.5853 0.117 0.25 0.80 490
Europe 13 61 104 118 91 70 99 36 0.5892 0.106 0.25 0.80 296
United States 0 8 37 33 24 22 20 7 0.6325 0.112 0.40 0.80 78
Canada 5 4 10 2 9 8 4 0 0.5756 0.077 0.50 0.75 21
Japan 14 27 16 11 19 20 23 6 0.5136 0.139 0.25 0.80 68
Australia/
New Zealand 0 3 5 6 1 5 5 3 0.5468 0.093 0.40 0.75 14
Hong Kong/
Singapore 1 0 6 6 6 4 1 2 0.6423 0.153 0.33 0.80 13
Financials 2 21 29 39 40 22 24 5 0.6316 0.1098 0.33 0.80 91
Energy 0 1 3 9 1 3 4 5 0.5571 0.0771 0.43 0.67 13
Utilities 3 5 11 15 4 9 15 6 0.5376 0.0912 0.33 0.75 34
Materials 5 7 20 17 8 11 24 6 0.5403 0.0842 0.25 0.75 49
Industrials 4 16 23 30 23 22 24 4 0.5975 0.1241 0.25 0.80 73
Consumer – staples 1 9 14 17 6 9 14 12 0.5390 0.1039 0.33 0.80 41
Consumer – discretionary 6 19 37 19 32 23 18 8 0.5962 0.1260 0.25 0.80 81
Health care 3 5 15 11 5 15 12 2 0.5627 0.0983 0.25 0.80 34
Telecom munications 2 7 10 5 11 3 6 4 0.5804 0.1389 0.33 0.80 24
Information technology 7 13 16 14 25 12 11 2 0.6049 0.1289 0.25 0.80 50
Table
II.
Number
of
stakeholder
issue
groups
Mission
statements
71

12. significantly higher than 0.5 holds for all country groups, except for Japan. With respect
to industries, although some differences can be found with respect to the mean of
FRACTION, the finding that the mean is significantly different from 0.5 holds for all
individual industries.
Table III contains the descriptive statistics for the individual stakeholder issue groups.
The stakeholder issue group which is most frequently addressed in the mission statement
is Customers (84 percent), followed by Employees (71 percent), Community (55 percent),
Environment (53 percent), Corporate Governance (47 percent), and Human Rights and
Supply Chain (14 percent). The average number of stakeholder issue groups in a mission
statement is 3.23. In total, 21 companies (3.4 percent) address zero stakeholder issue
groups, whereas 41 companies (6.7 percent) address all six stakeholder issue groups.
A paired sample t-test confirms that resource based stakeholders groups are mentioned
more often than non-resource based stakeholder groups. Table III also indicates that the
average amount of stakeholder issue groups addressed in mission statements tends to
vary between countries and industries. The highest amount of stakeholder issue groups
areaddressedinAustralia/NewZealand(3.92),whereasthelowestamountsofstakeholder
issue groups are addressed in Canada (2.19) and Japan (2.59). However, Japan is the only
country where the number of resource based stakeholders groups is not significantly
higher than the number of non-resource based stakeholder groups. With respect to
industry differences, the number of stakeholder groups mentioned is particularly low in
the information technology industry (2.54) and relatively high in the energy industry
(4.62). However, for all individual industries the number of resource based stakeholder
groups is significantly higher than the number of non-resource based stakeholder groups.
The descriptive statistics presented here are in line with the findings of prior
research. According to Bartkus et al. (2004), mission statements in Japan contain on
average the least amount of stakeholders in comparison to mission statements in
Europe and the US. The descriptive statistics support this outcome, since the amount
of stakeholder issue groups in the mission statement is lower in Japan (2.59) than in
Europe (3.37) and the US (3.38). In addition, Bartkus et al. (2004) found that Japanese
mission statements contain less frequently employees and investors, but contain more
frequently the society in comparison to mission statements from Europe and the US.
The descriptive statistics also support this outcome. For example, the stakeholder issue
group ‘Community’ is addressed in the mission statement in both Europe and the US in
54% of the cases, whereas in Japan the “Community” is addressed in 69 percent of the
statements.
Univariate analysis
Table IV contains the Pearson correlations between the dependent variable and the
independent variables. Table V shows the correlation matrix. First, several
country-specific variables correlate significantly with the dependent variable
(FRACTION). The dummy variable “German Legal Origin” (LGERMAN) shows a
significant negative correlation, whereas the dummy variables “English Legal Origin”
(LENGLISH) and “Legal Tradition: Common Law” (LCOMMON) show significant
positive correlations. Also the variable “Ownership Concentration” (OWNERSHI)
shows a positive correlation to the dependent variable. Since these country-specific
variables have not been used before as independent variables in mission statement
research, no clear expectation on the correlations has been formulated.
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13. Resource based stakeholder groups (Mean/SD) Non-resource based stakeholder groups (Mean/SD)
Customers Employees Corporate Governance All Community Environ-ment Human Rights All N
Full sample 0.84/0.365 0.71/0.452 0.47/0.499 2.01/0.917 0.55/0.498 0.53/0.500 0.14/0.349 1.21/1.012 490
Europe 0.85/0.357 0.74/0.438 0.52/0.500 2.10/0.879 0.54/0.500 0.59/0.492 0.15/0.360 1.27/1.029 287
United States 0.95/0.222 0.90/0.305 0.48/0.503 2.32/0.655 0.54/0.502 0.38/0.490 0.14/0.352 1.06/0.998 77
Canada 0.57/0.507 0.48/0.512 0.38/0.498 1.43/0.978 0.33/0.483 0.43/0.507 0.00/0.000 0.76/0.768 21
Japan 0.75/0.436 0.40/0.493 0.21/0.407 1.35/0.989 0.69/0.465 0.44/0.500 0.11/0.310 1.24/0.964 66
Australia/New Zealand 0.86/0.363 0.79/0.426 0.57/0.514 2.21/0.802 0.79/0.426 0.64/0.497 0.29/0.469 1.71/0.914 14
Hong Kong/Singapore 0.92/0.277 0.92/0.277 0.46/0.519 2.31/0.855 0.46/0.519 0.31/0.480 0.15/0.376 0.92/1.115 13
Financials 0.88/0.329 0.67/0.474 0.63/0.485 2.15/0.855 0.49/0.503 0.39/0.490 0.07/0.258 0.93/0.964 85
Energy 0.92/0.277 1.00/0.000 0.69/0.480 2.62/0.650 0.77/0.439 0.85/0.376 0.38/0.506 2.00/1.000 13
Utilities 0.88/0.331 0.76/0.431 0.50/0.508 2.12/0.977 0.65/0.485 0.85/0.359 0.18/0.387 1.68/0.912 33
Materials 0.76/0.434 0.73/0.446 0.52/0.505 2.00/0.957 0.67/0.474 0.78/0.422 0.13/0.337 1.57/0.913 47
Industrials 0.86/0.346 0.73/0.449 0.49/0.503 2.08/0.924 0.53/0.502 0.51/0.503 0.08/0.278 1.12/0.927 72
Consumer – staples 0.90/0.300 0.73/0.449 0.51/0.506 2.15/0.853 0.76/0.435 0.68/0.471 0.34/0.480 1.78/1.037 41
Consumer – discretionary 0.73/0.448 0.40/0.492 0.35/0.479 1.85/0.686 0.45/0.501 0.40/0.492 0.19/0.393 1.02/1.012 79
Health care 0.88/0.327 0.79/0.410 0.32/0.475 2.00/0.921 0.74/0.448 0.50/0.508 0.09/0.288 1.32/0.806 34
Telecom munications 0.83/0.381 0.67/0.482 0.25/0.442 1.75/0.897 0.50/0.511 0.46/0.509 0.17/0.381 1.13/1.191 24
Information technology 0.82/0.388 0.58/0.499 0.34/0.479 1.74/1.026 0.36/0.485 0.38/0.490 0.06/0.240 0.80/0.926 50
Table
III.
Descriptive
statistics
of
stakeholder
issue
groups
Mission
statements
73

14. The dummy variables LENGLISH and LCOMMON have identical correlations to the
dependent variable since the variables are perfectly correlated to each other.[13]
Therefore, the dummy variable LCOMMON will be excluded in the multivariate
analysis. Second, the visibility of the industry (VISIBLE) shows a significant negative
correlation to the dependent variable. Therefore, companies which are positioned in a
highly visible industry address relatively more stakeholder issue groups which do not
provide resources to the company in comparison to stakeholder issue groups which do
provide resources to the company. The negative correlation is expected since a higher
level of visibility might increase the need for companies to provide assurances to
non-resource providing stakeholders in the attempt to avoid (any) negative publicity.
Third, the company-specific variables “Number of employees” (LNEMP) and “Net
Sales or Revenues” (LNSALES) have a significant negative correlation with the
dependent variable. The negative correlation is expected since larger companies are
expected to include more non-resource providing stakeholders as opposed to resource
providing stakeholders in their mission statement because a higher level of consumer
visibility and political risk might increase the need for companies to address
non-resource providing stakeholders.
The variables LNEMP, LNSALES, LNASSET, and LNMCAP all have a significant
positive correlation with each other. In addition, the variable LNEMP has a significant
positive correlation with the stakeholder issue group “Employees.” Therefore, the
variable LNSALES will be used in the multivariate analysis as a proxy for company size.
Multivariate analysis
Table VI contains the output of the multivariate regression analysis[14].
Several significant variables are identified in the multivariate analysis. First, from
the country-specific variables, “German Legal Origin” (LGERMAN) and “French Legal
Origin” (LFRENCH) have a significant negative relationship with the dependent
variable (FRACTION). Countries with a German Legal Origin are Austria, Germany,
Independent variable Correlation with FRACTION
Panel A. Univariate tests
LGERMAN 20.175 * * *
LFRENCH 0.053
LENGLISH 0.096 * *
LSCANDI 0.023
LCOMMON 0.096 * *
RIGHTS 20.028
EQUITYMA 0.002
OWNERSHI 0.129 * * *
VISIBLE
LNEMP 20.193 * * *
20.118 * *
LNSALES 20.125 * * *
LNASSET 20.045
LNMCAP 20.071
Notes: Pearson correlations are used since none of the variables have an ordinal scale. Significant at
the *0.10; * *0.05; * * *0.01 levels, respectively
Table IV.
Univariate tests
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15. 1 2 3 4 5 6 7 8 9 10 11 12
Panel B. Correlation matrix
1 LGERMAN
2 LFRENCH 2.295 * *
3 LENGLISH 2.550 * * 2.490 * *
4 LSCANDI 2.153 * * 2.136 * * 2.254 * *
5 LCOMMON 2.550 * * 2.490 * * 1.00 * * -.254 * *
6 RIGHTS 2.273 * * 2.599 * * .784 * * 2.124 * * .784 * *
7 EQUITYMA 2.227 * * 2.614 * * .739 * * 2.088 .739 * * .717 * *
8 OWNERSHI .064 2.509 * * 2.506 * * .076 2.506 * * 2.832 * * 2.524 * *
9 VISIBLE 2.093 * .033 .074 2.041 .074 2.003 2.019 .037
10 LNEMP 2.074 .015 .057 2.009 .101 * .057 2.022 2.129 * * .081
11 LNSALES 2.019 .009 .027 2.036 .027 .063 2.046 2.101 * .113 * .854 * *
12 LNASSET 2.113 * .037 .083 2.030 .083 .072 2.021 2.012 2.045 .617 * * .835 * *
13 LNMCAP 2.106 * 2.074 .175 * * 2.040 .175 * * .206 * * .067 2.172 * * .132 * * .584 * * .743 * * .728 * *
Notes: *Correlation is significant at the 0.05 level (two-tailed); * *Correlation is significant at the 0.01 level (two-tailed)
Table
V.
Correlation
matrix
Mission
statements
75

16. Japan, and Switzerland. Countries with a French legal origin are Belgium, France, Italy,
and Spain. According to Hope (2003) both legal origin and culture are important in
explaining corporate disclosure. He states that, having common law as a reference
group, French and German legal regimes are associated with lower disclosure, whereas
the Scandinavian (Nordic) legal regime is associated with higher disclosure. Second,
the variable “Ownership Concentration” (OWNERSHI) has a significant positive
relationship with the dependent variable at the 5 percent level. Countries with a low
level of ownership concentration are the US, UK, and Japan, whereas countries with a
high level of ownership concentration are Italy, Germany and Belgium. The positive
relationship might be explained by reduced information asymmetries in companies
with a higher level of ownership concentration. Since information can more effectively
be communicated via private channels in high concentration companies, these
companies might have a lesser need to focus on public disclosure to provide assurances
to shareholders. Third, the industry-specific variable VISIBLE has a significant
negative relationship with FRACTION at the 1 percent level, suggesting that, as
expected, high-profile companies might be inclined to address non-resource providing
stakeholders in the attempt to avoid negative publicity. Lastly, in concordance with the
univariate analysis, the multivariate analysis indicates that the company-specific
variable LNSALES has a significant negative correlation with FRACTION. As the size
of a company appears to be positively related to the level of corporate disclosure
(Cormier et al., 2005), the size of a company similarly is related to the content of the
mission statement where larger companies address more non-resource based
stakeholder groups compared to smaller companies.
Conclusion
This study introduces the dependence of the company on the stakeholder as an
explanatory factor for the inclusion of stakeholders in mission statements. Utilizing the
resource dependence perspective by Pfeffer and Salancik (1978), stakeholders which
provide resources to the company are assumed to be more important to the company
than stakeholders which do not provide resources. As a consequence, mission statement
content is expected to be more focused on the first group in comparison to the latter. The
FRACTION ¼ b0 þ b1 LGERMAN þ b2 LFRENCH þ b3 LSCANDI þ b4 RIGHTS þ b5
EQUITYMA þ b6 OWNERSHI þ b7 VISIBLE þ b8 LNSALES þ 1
Variable Expected sign Coeff T-value P-value
CONSTANT ? 0.782 8.329 0.000* * *
LGERMAN ? 20.083 23.862 0.000* * *
LFRENCH ? 20.054 21.914 0.056*
LSCANDI ? 20.036 21.301 0.194
RIGHTS ? 0.000 20.023 0.982
EQUITYMA ? 20.002 21.493 0.136
OWNERSHI ? 0.125 1.917 0.056*
VISIBLE 2 20.056 25.143 0.000* * *
LNSALES 2 20.019 22.123 0.034* *
Notes: Adjusted R 2
¼ 0.110 ; F ¼ 7.633 (0.000); Durbin-Watson ¼ 1.963. *,* * and * * *Significant at
the 0.10, 0.05 and 0.01 levels, respectively
Table VI.
Multivariate results
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17. results show that, on average, stakeholder groups which provide resources are
addressed more frequently in mission statements in comparison to stakeholder groups
which do not provide resources, confirming our main research question. These results
hold for all individual countries in our sample except Japan, and for all industries.
Consequently, stakeholder dependency theory can be used to explain the content of
mission statements, in particular the frequency of references to stakeholder groups in
these statements. Therefore, further studies that try to explain the content and role of
mission statements might be based on the dependence of the company on stakeholders,
rather than the dependence of stakeholders on the company as used in previous studies.
In addition, several further explanatory variables have been tested in this study. First,
due to the large sample size of 490 observations, international differences in mission
statement content are observed using legal factors introduced by La Porta et al. (1997,
1998).Second,industry-specificdifferencesarecaptured byclassifyingindustriesaseither
high-profile or low-profile. Third, the size of the company is used to account for
company-specific differences. Descriptive statistics on country-specific differences in
mission statement content appears to be consistent with the study by Bartkus et al. (2004).
The multivariate regression analysis confirms that both country-specific variables and
industry-specific variables have an influence on the dependent variable (the number of
stakeholder issue groups which provide resources to the company divided by the total
number of stakeholder issue groups). First, with respect to the country-specific variables,
“German Legal Origin” and “French legal Origin” have a significant negative relationship
and “OwnershipConcentration”has a significant positive relationship withthe proportion
of resource-based stakeholders mentioned in mission statements. Second, the visibility of
the industry appears to have a highlysignificantnegative relationship with the dependent
variable as well as the size of a company.
The findings of this study have several implications for organizations. The observed
differences in mission statement content with respect to stakeholder management
signify the fact that the mission statement is not a standardized document which can
simply be ignored by managers. According to this study, stakeholder inclusion in
mission statements appears to be dependent on both country- and industry-specific
factors. Therefore, managers must be aware of the environment in which the company is
situated, in order to approach the stakeholders which are most important to the
organization. A failure to recognize and include essential stakeholders in the mission
statement may be costly in the long run, particularly when competitors are better able to
address these stakeholders. Therefore, this result is particularly important for
organizations which currently do not have a mission statement or for organizations
where stakeholder management has no significant role in the creation of the mission
statement.
The main limitations of this study are threefold. First, the database used adopts a
broad definition of a mission statement, as a result of which the study may also include
documents such as vision statements. Second, additional factors might exist that could
explain the inclusion of stakeholder groups in the mission statement. For example,
Hope (2003) states that both legal origin and culture are important in explaining
corporate disclosure. Therefore, literature on cultural dimensions by Hofstede (1980)
and Schwartz (1994) might also be used as explanatory variables in future research.
Finally, the industry classification scheme partly was newly developed in this study
Mission
statements
77

18. and some additional evidence with respect to the classification of various industries
will be required to further substantiate the industry results found in this study.
The results of the study indicate that further research on the use of the mission
statement for external purposes is called for. This study uses a separation of stakeholder
groups based on the resource dependence perspective, focusing on the dependence of the
company. In this study, the definition of both groups has been kept constant over all
companies and industries. However, it may be argued that not all companies or industries
are equally dependent on a particular stakeholder group. For example, within the service
industry, companies may be particularly dependent on employees whereas companies
within the chemical sector may be more dependent on investors for providing funds to
invest in plants and technologies. Future studies should therefore develop more precise
measures of the dependency of companies on stakeholder groups. In addition, stakeholder
groups can also be classified in other ways which might provide further explanations of
stakeholder inclusion in mission statements. A second issue for further research is the
international differences in mission statements. In comparison to previous studies, this is
the first studywhere country-specific variables have been used in order to explainmission
statement content. Since both German legal origin and ownership concentration are found
to be significant explanatory variables, additional research on the influence of legal and
institutional factors on mission statement content is needed.
Notes
1. Campbell et al. (2001, p. 65): “The mission statement is the formal statement of a company’s
mission”.
2. Oxford University Press (2003, p. 919) on ‘Isomorphic’: “Corresponding to or similar in form
and relations. . . . ”.
3. To enhance the variability in the scale for FRACTION, it is calculated as follows: (number of
resource providing stakeholder groups þ1)/((number of resource providing stakeholder
groups þ1) þ (number of non-resource providing stakeholder groups þ1)). The theoretical
minimum of 0.20 is reached when a mission statement contains zero resource providing
stakeholder groups and three non-resource providing stakeholder groups
[ ¼ (0 þ 1)/((0 þ 1) þ (3 þ 1))]. The theoretical maximum of 0.80 is reached when a
mission statement contains three resource providing stakeholder groups and 0 non-resource
providing stakeholder groups. When FRACTION is equal to 0.5, a mission statement
contains the same amount of resource providing stakeholder groups as non-resource
providing stakeholder groups.
4. The data that is used in the empirical part of the study, uses information on corporate
governance issues to address the references to shareholders in mission statement.
5. Frooman (1999, p. 195) has listed the conditions for resource dependence: “Operationalized,
resource dependence is said to exist when one actor is supplying another with a resource that
is marked by (1) concentration (suppliers are few in number), (2) controllability,
(3) nonmobility, (4) nonsubstitutability (Barney, 1991; Emerson, 1962; Jacobs, 1974; Pfeffer
and Salancik, 1978), or (5) essentiality”.
6. The variables “Legal Enforcement” and “The Importance of Equity Market” in Leuz et al.
(2003) are the mean score of variables in La Porta et al. (1997, 1998). Other variables from
La Porta et al. (1998) have been used by Leuz et al. (2003) without additional adaptations. For
further reference see Leuz et al. (2003), pp. 516-17.
7. First, the variable “Legal Enforcement” is not included in this study, since the lowest scale
score reached in this study is considerably higher than the lowest scale score reached in Leuz
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19. et al. (2003). Second, the variable “Disclosure Index”, which is a measure for the inclusion of
90 items in the annual report of 1990 is not included, since there are serious doubts whether
these data are comparable to the content of today’s annual reports.
8. Leuz et al. (2003, p. 516): “The Importance of Equity Market is measured by the mean rank
across three variables used in La Porta et al. (1997): (1) the ratio of the aggregate stock
market capitalization held by minorities to gross national product, (2) the number of listed
domestic firms relative to the population, and (3) the number of IPOs relative to the
population”.
9. La Porta et al. (1998, p. 1125): “Ownership, 10 largest private firms: The average percentage
of common shares owned by the three largest shareholders in the 10 largest nonfinancial,
privately owned domestic firms in a given country. A firm is considered privately owned if
the state is not a known shareholder in it”.
10. Datastream Advance has been used to extract the data. Mnemonic codes: number of
employees (WC07011), total assets (WC02999), net sales or revenues (WC01001) (WC08001).
11. Other countries are Australia (16), Austria (1), Belgium (15), Denmark (6), Finland (8),
Germany (32),Hong Kong (7),Ireland(5), Luxembourg(2), theNetherlands(24),NewZealand(4),
Norway (3), Singapore (7), Spain (11) and Sweden (17).
12. For a full detail on the content of the SiRi Global Profiles, visit http://www.siricompany.com/
13. The following countries have both a Common Law Tradition and an English Legal Origin:
Australia, Canada, Hong Kong, UK, and United States.
14. The Durbin-Watson statistic of 1.963 is within acceptable parameters indicating no sign of
autocorrelation. Also, no abnormal VIF scores are observed indicating an absence of
multicollinearity problems.
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Corresponding author
Laury Bollen can be contacted at: l.bollen@aim.unimass.nl
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