MULTINATIONALS, ENVIRONMENT AND GLOBAL COMPETITION: A CONCEPTUAL FRAMEWORK

This chapter presents a conceptual framework to understand the role of multinational enterprises in the process of environmental standard setting in the global economy. Inside the multinational, we discuss the impact of path-dependency and irreversibility on environmental investment, and the importance of the integrated network structure of the multinational in enabling the transfer of standards within the firm. Outside the firm, we discuss the impact of regulation and market forces, and particularly the role of NGOs, in triggering change in firm behavior both at home and abroad. We conclude by considering the impact of supranational institutions on the environmental behavior of multinationals.