Environmental sustainability practices and offshoring activities of multinational corporations across emerging and developed markets

Date

2020-12-24

Advisors

Journal Title

Journal ISSN

ISSN

Volume Title

Publisher

International Business Review

Type

Article

Peer reviewed

Yes

Abstract

Using panel data of 1,080 multinational corporations (MNCs) from the United States, we examine the effects of environmental sustainability practices on the degree of firms’ offshoring activities. In addition, we disaggregate offshoring activities into their core components depending on whether or not the firm buys (inputs) or sells (outputs) and/or owns assets in a given country and examine the extent to which sustainability practices influence the different components of offshoring decisions. The results indicate that sustainability practices significantly affect offshoring activities of MNCs. In particular, we found that sustainable business practices matter when the firm sells goods or owns assets in the given host nation. Additionally, the results show that the sustainability–degree of the internationalization relationship is crucial for MNCs that have offshoring activities in advanced economies relative to those firms that have activities in emerging markets. Our results are robust to alternative explanations.

Description

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

Keywords

Environmental sustainability, offshoring strategy, production assets, advanced economies, emerging economies

Citation

Lartey, T. A., Amankwah-Amoah, J., Danso, A., Adomako, S., Khan, Z., and Tarba, S. Y. (2020) Environmental sustainability practices and offshoring activities of multinational corporations across emerging and developed markets. International Business Review, 101789.

Rights

Research Institute

Finance and Banking Research Group (FiBRe)