Globalization and Voluntary Environmental Management in Developing Countries

Madhu Khanna and Yuan Liao ()

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2014, vol. 9, issue 1, 138-163

Abstract: Weak capacity to enforce regulations and sanction violators, and an emphasis on economic growth in developing countries has led to concerns about worsening environmental conditions and the potential for these countries becoming pollution havens for multinational corporations. International environmental standards, voluntary programs, and public disclosure programs have gained popularity because they engage market participants in providing incentives for self-regulation and have the potential to substitute for the lack of domestic regulatory capacity. This paper analyzes the motivations for firms to undertake voluntary environmental management and reviews the empirical evidence on the type of firms participating in such initiatives and their effectiveness in improving environmental performance. We also consider the special case of China that has witnessed dramatic globalization following its acceptance into the World Trade Organization and participation by its firms in global supply chains. We conclude with a discussion of the effectiveness of these efforts as a substitute for weak regulatory and civic society pressures in these countries.

Keywords: voluntary programs; ISO 14001; public disclosure programs; foreign direct investment; export-oriented firms (search for similar items in EconPapers)
JEL-codes: Q56 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:9:y:2014:i:1:p:138-163

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