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Green gifts from abroad? FDI and firms' green management

Peter Kannen, Finn Semrau () and Frauke Steglich

No 2200, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Improvements of firms' environmental performance crucially determine the speed of a country's green economic transformation. In this paper, we investigate whether firms with foreign ownership are more likely to adopt 'green' management practices, which determine the capability to monitor and improve a firm's impact on the environment. By using multi-country firm-level data, we show that foreign ownership increases the likelihood of implementing green management practices. Considering country heterogeneity, we reveal that only firms based in more developed economies and in countries with better environmental performance benefit from foreign direct investment, while this is not the case for firms based in less developed economies or countries with weak environmental performance. In addition, we find that the effect is more robust for manufacturing sector firms than for service sector firms. Overall, our results suggest that foreign ownership can contribute towards a country's green economic transformation.

Keywords: Foreign direct investment; Green/environmental management; Green economic transformation; Emerging markets (search for similar items in EconPapers)
JEL-codes: F21 F64 M10 Q56 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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