Beyond reductionism: rethinking MNEs’ role in environmental crises

Liena Kano (), Birgitte Grøgaard (), Luciano Ciravegna () and Gilbert Kofi Adarkwah ()
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Liena Kano: University of Calgary
Birgitte Grøgaard: BI Norwegian Business School
Luciano Ciravegna: INCAE Business School
Gilbert Kofi Adarkwah: BI Norwegian Business School

Journal of International Business Studies, 2025, vol. 56, issue 6, No 7, 795-806

Abstract: Abstract This counterpoint challenges the view advanced by Yu, Bansal, and Arjaliès (J Int Business Stud 54:1151–1169, 2023), who argue that multinational enterprises (MNEs), by virtue of their cross-border operations, are inherently detrimental to the environment. While Yu et al.’s call for responsible resource use is commendable, we contend that their framework oversimplifies the complex realities of international business (IB). Drawing on New Internalization Theory (NIT), we examine environmental crises through the lens of multilevel complexity—macro-level institutional interdependencies, firm-level heterogeneity, and individual-level cognitive and behavioral constraints. Our approach underscores the role of bounded rationality and bounded reliability across all relevant actors—not just MNE managers—in shaping environmental outcomes. We find that Yu et al.’s proposed strategies give limited attention to the institutional, industry, organizational, and governance conditions under which environmental value is created. By contrast, we apply comparative institutional analysis to investigate MNEs’ impact on the environment as compared to feasible, real-world alternatives. We argue that meaningful environmental progress hinges not on targeting MNEs, but on fostering multilateral coordination among public, private, and civil society actors, with MNEs being well positioned to lead such collaborations. We call for scholarship that avoids ideological overreach, embraces IB theory, and acknowledges MNEs as key agents in advancing environmental sustainability.

Keywords: New internalization theory; MNE; Governance; Natural environment; Bounded rationality; Bounded reliability; Energy transition (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41267-025-00794-y

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