“Investigating the Effects of the Global Economy on Policy and Practice in Developing Countries: Foreign Direct Investment and the Environment”
Premise:
How does corporate environmentalism differ between global companies from different countries? Multinational corporations (MNCs) operate and compete in different institutional contexts across different markets in multiple countries at the same time allowing them to create a conduit for the exportation and development of different levels of environmentalism. Research suggests that global behavior may depend on the development level of the company’s home country and where there are more stringent environmental laws those companies carry with them more stringent practices. I wish to test this premise by asking: are the effects of foreign investment from MNCs on a developing country’s environment tied to the ‘source’ of the foreign investment?
Substantive Chapters:
“Corporate Sustainability Reports and Exporting Environmentalism: Operationalizing the Environmental Ideology of Corporations”
- Do international investors have better environmental policies? Studies show multinational corporations (MNCs) improve environmental outcomes abroad, because their investments bring cleaner policies and practices. However, research on ecological modernization finds that while MNCs are paying more attention to environmental issues than they have historically, they define environmental goals in terms of financial motives that allow them to continue to carry on business as usual. As a result the research is filled with opposing conclusions as to whether MNCs positively or negatively impact environmental outcomes in recipient countries. By looking at MNCs’ internal environmental policy and practices, this study can show how and why studies result in different outcomes. This paper operationalizes the internal environmental policies of global companies through sustainability reports. This analysis uses the Global Reporting Initiative (GRI) indicators, and a list of environmental specific questions targeted at MNCs to analyze sustainability reports from the top 250 global companies, from the Fortune Global 500. Providing a systematic evaluation and ranking, by score, of MNCs from different countries, both within and across different industries. This chapter finds preliminary results that allow for distinct classification of MNCs across different industries and countries of origin that may lead to different environmental outcomes in the recipient country.
The Global Economy and the Environment: A Quantitative Study of the ‘Source Effects’ of Investment on Environmentalism in Developing Countries
The China Effect: the influence of Chinese economic globalization on environmental policy in developing states
- This chapter explores the possibility of a unique Chinese effect where developing countries begin to reflect the environmental practices of China, which has emerged as a major investor in developing countries and a recipient of developing country exports. I demonstrate that when international economic flows from China to a developing country increase, the net effect of these flows on environmental standards is apparent in both policy and practice. In this paper, I will craft a quasi-experimental design in the context of Sub-Saharan Africa country economic ties, and apply a compositional effects model to a widely debated policy issue: the impact of FDI and international trade on regulatory policy, norms, and industrial practices. I will also assess empirically through case studies how the increasing globalization flows between African countries and China—now Africa’s biggest trading partner and a large FDI contributor—have influenced environmental practice and regulation. This study provides preliminary evidence for a new perspective on international economic flows, and reveals a modest ‘China effect’ on environmental policy in developing countries.
