How does state ownership affect pollution control? Evidence from the Chinese iron and steel industry

Institutional Determinants of Environmental Corporate Social Responsibility: Are Multinational Entities Taking Advantage of Weak Environmental Enforcement in Lower‐Income Nations?

“…While technology has improved the flow of information around the world, a toxic chemical spill or other environmental bad practice in sub‐Saharan Africa might get less attention than the same practice in the Netherlands or some other high‐income country. Some governments let companies get away with polluting if they have a financial interest in the success of the polluting companies, suggesting that governments and companies may collude to keep evidence of poor environmental performance from coming to light (Tang and Smith ).…”

“…Rather than being more responsible, MNEs may be getting away with more in low‐income nations, partly because news from those nations rarely reaches the rest of the world, and partly, perhaps, because they are so good at encouraging the “race to the bottom” (Arora and Dharwadkar ; Williamson et al ) that their misdeeds go not only unpunished but unrecorded (Halter and de Arruda ). They could even be outsourcing the pollution, establishing partnerships with local businesses unaffected by global exoisomorphic pressure and shielded by their own governments from negative repercussions of negative ESCR (Tang and Smith ).…”

“…Halter and de Arruda (2009) show that MNEs exploit developing nations with weak formal institutional constructs, as a lack of transparency promotes corruption. A recent longitudinal study (Tang and Smith 2012) suggests that governments in developing economies help companies they favor elude pressure to be environmentally responsible. Decision-makers in host countries may be pressured into lowering their standards if local norms are lower than in their home nation (Bailey and Spicer 2007;Kliukinskait _ e-Vigil 2011).…”

“…For the same reasons that regulations concerning ECSR are stricter in upper‐middle‐income nations than in lower‐income nations, the ability to realize differentiation advantages rather than cost advantages will be higher, and MNEs may be motivated to differentiate based on something other than ECSR in upper‐middle‐income nations. Innovation and marketing are such alternatives, known to work (Hull and Rothenberg ; McWilliams and Siegel ) so long as the repercussions of exploitative actions can be controlled (Miles et al ; Tang and Smith ). The effort required to exceed local standards in upper‐middle‐income nations is considerably greater than it is in poorer nations with lower standards, so if endoisomorphic pressure dominates, it will be the pressure to standardize.…”