Differentiated effects of formal and informal institutional distance between countries on the environmental performance of multinational enterprises

Javier Aguilera-Caracuel, Nuria Esther Hurtado-Torres, Juan Alberto Aragón-Correa and Alan Rugman

Journal of Business Research, 2013, vol. 66, issue 12, 2657-2665

Abstract: This research examines the influence of environmental institutional distance between home and host countries on the standardization of environmental performance among multinational enterprises using ordinary least-squares (OLS) regression techniques and a sample of 128 multinationals from high-polluting industries. The paper examines the environmental institutional distance of countries using the concepts of formal and informal institutional distances. The results show that whereas a high formal environmental distance between home and host countries leads multinational enterprises to achieve a different level of environmental performance according to each country's legal requirements, a high informal environmental distance encourages these firms to unify their environmental performance independently of the countries in which their units are based. The study also discusses the implications for academia, managers, and policy makers.

Keywords: Multinational enterprises; Environmental performance; Formal and informal environmental distance between countries; Country and firm-specific advantages (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:66:y:2013:i:12:p:2657-2665

DOI: 10.1016/j.jbusres.2013.04.002

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