Corporate governance,environmental regulations,and technological change

This paper investigates the relationship between environmental regulations and innovation by focusing on the automobile industry in a cross-country setting. We provide empirical evidence that the presence of agency problems mitigates the negative effects of environmental regulations on overall R&D activity, which leads to full compensation when the degree of agency problems is sufficiently high. Guiding our empirical analysis, we provide a general model consistent with the structure of existing ownership data. Specifically, we model ownership structure as a combination of two extreme corporate governance types. On the one extreme there are profit maximizers, and on the other extreme there are managers who are only concerned with their private benefits. The model leads to a simple country level ownership indicator and shows that if an economy is dominated by firms with higher agency problems, then pollution tax might even increase overall R&D, while reducing pollution. According to our estimations, such an outcome is possible only for out-of-sample values of the ownership indicator, where the degree of agency problems is extremely high.     

Optimal combination of innovation and environmental policies under technology licensing

Under what conditions will a carbon tax encourage environmental innovation? Can a regulator design an optimal environmental policy to reduce emissions and to promote clean technologies? This paper studies optimal environmental policy in the situation where a monopoly innovator develops and licenses clean production technologies to downstream polluting firms. We find that (i) a higher emission tax will encourage innovation when the burden of the tax payment in the polluters' costs and/or the price-elasticity of the demand for polluting goods are small, (ii) the innovation-inducing effects of emission tax are inversely related to the emission-reduction (Pigouvian) effects of the tax, and (iii) the social optimum can be achieved by the mix of tax and subsidy. We also show that if the policy instrument is limited to the tax, the second-best tax rate would lie between the marginal damage and the first-best rate. By performing numerical simulations, we also demonstrate that the optimal mix of the emission tax and R&D subsidy can have “double dividend” benefits.     

Climatic Factors as Determinants of International Migration

We examine natural disasters and long‐run climatic factors as potential determinants of international migration, implementing a panel dataset of bilateral migration flows from 1960 to 2000. We find no direct effect of long‐run climatic factors on international migration across our entire sample. These results are robust when conditioning on origin‐country characteristics, when considering migrants returning home, and when accounting for the potential endogeneity of migrant networks. Rather, we find evidence of indirect effects of environmental factors operating through wages. We find that epidemics and miscellaneous incidents spur international migration, and there is strong evidence that natural disasters beget greater flows of migrants to urban environs.     

The puzzle of greenhouse gas footprints of oil abundance

The present inquiry lays a groundwork for the analysis of the net greenhouse gas (GHG) footprint of oil in the oil-abundant settings. To address the research question, the study puts forward a three-sector decision model, which provides a common ground for the assessment of the interaction of the structuralist and institutional factors influencing environmental pollution in the oil-reliant economies. The study shows that fossil-fuel abundance triggers forces, which induce diametrically opposed effects concerning atmospheric pollution. These are the rising carbon-intensive oil extraction and processing and fossil-fueled power generation versus shrinkage of the carbon-intensive manufacturing and growth of the low-carbon tertiarization. The theoretical analysis enables compartmentalization of the essential factors, which determine GHG emissions in the respective countries. To assess the significance of the proposed theoretical framework, the study employs multivariate panel co-integration techniques and two-stage fixed effects estimations for a dataset of 38 oil-producing countries for the time period between 1960 and 2018. In contrast to the existing literature, this study drives apart from the black box approaches that employ just one omnibus variable, per capita income.     

The Road to Sustainability: Exploring the Process of Corporate Environmental Strategy Over Time

We explore corporate environmental strategy over time, investigating the patterns of evolving environmental investment decisions. Longitudinal case studies provide evidence that environmental strategy evolves through a feedback process, wherein outcomes of earlier decisions have an impact on subsequent decisions. Specifically, positive feedback from outcomes like innovation triggers higher goals, enhancing the undertaking of advanced investments, whereas negative feedback from outcomes, such as increased costs, decelerates the adoption of further investments. The study points to an emergent view of environmental strategy, where capabilities that are gradually developed in concomitance with environmental outcomes lead to an upgrading of environmental goals, thus triggering the feedback process. The process eventually culminates in higher levels of environmental conduct, being more and more integrated with business strategy and competitive advantage. Managers' values and environmental attitudes influence environmental decisions and actions, affecting the acceleration of the feedback process and the magnitude of responses. Managerial implications are discussed. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Subsidiary autonomy and performance in Japanese multinationals in Europe

Notwithstanding the growing body of research on headquarters–subsidiary relationships, the conditions under which subsidiary autonomy leads to enhanced subsidiary performance is still a subject of debate. This study adopts a contingency approach and investigates the effects of external uncertainties and intra-MNE coordination on the performance benefits of subsidiary autonomy. The empirical analysis is based upon cross-sectional data collected from 88 European subsidiaries of Japanese MNEs. Our findings show that subsidiary autonomy has a greater impact upon performance (a) under conditions of technological uncertainty; and (b) when expatriate involvement is high, as the subsidiary can reap the full benefits of entrepreneurial capabilities and enjoy resource interdependencies through interactions with the parent simultaneously. MNC executives should aim for an appropriate balance between subsidiary autonomy and these internal and external factors so that the subsidiaries achieve superior performance.     

Can environmentally oriented CEOs and environmentally friendly suppliers boost the growth of small firms?

The core question addressed in the natural resource‐based view (NRBV) of the firm is how to develop and exploit resources beneficial for both the natural environment and firm performance. Due to the resource constraints and increased competition facing small manufacturing firms, achieving this is a challenge for such companies. Building on the NRBV and resource orchestration literatures, we examine the relationship between green purchasing capabilities (GPCs), CEO's environmental orientation (EO), and firm growth. Results from 304 Swedish small manufacturing firms indicate a significant relationship between GPC and growth, and this relationship is positively moderated by the EO of the CEO.     

Gender and climate change: Do female parliamentarians make difference?

This paper investigates whether female political representation in national parliaments influences climate change policy outcomes. Based on data from a large sample of countries, we demonstrate that female representation leads countries to adopt more stringent climate change policies. We exploit a combination of full and partial identification approaches to suggest that this relationship is likely to be causal. Moreover, we show that through its effect on the stringency of climate change policies, the representation of females in parliament results in lower carbon dioxide emissions. Female political representation may be an underutilized tool for addressing climate change.     

Quantifying and understanding land cover changes by large and small oil palm expansion regimes in the Peruvian Amazon

With rapid increases in global food demand and production, oil palm expansion constitutes a major emerging challenge for forest conservation in Amazonia and other tropical forest regions. This threat is evident in the Peruvian Amazon, where local and national incentives for oil palm cultivation along with growing large-scale investments translate into accelerated oil palm expansion. Environmental sustainability of oil palm cultivation in the Peruvian Amazon is contingent on policy incentives for expansion onto already-cleared lands instead of biodiverse, high carbon primary rainforests. Previous research indicates that while industrial plantations use less land area than local smallholders, companies have a higher tendency to expand into primary rainforests. However, the motivations behind these differing expansion scenarios remain unclear. In this study we combine data from optical and radar satellite sensors with training information, field discussions, and review of public documents to examine the policy incentives and spatial patterns associated with oil palm expansion by smallholders and industries in one of Peru’s most rapidly changing Amazonian landscapes: the Ucayali region of the city of Pucallpa. Based on our satellite-based land cover change analysis, we found that between 2010 and 2016, smallholders utilized 21,070 ha more land area for oil palm than industries but industrial expansion occurred predominantly in old growth forests (70%) in contrast to degraded lands for smallholders (56%). Our analysis of national policies related to oil palm expansion reveal policy loopholes associated with Peru’s “best land use” classification system that allow for standing forests to undergo large-scale agricultural development with little government oversight. We conclude that both sectors will need careful, real-time monitoring and government engagement to reduce old-growth forest loss and develop successful strategies for mitigating future environmental impacts of oil palm expansion.     

The Moderating Role of Strategic Integration in Performance Improvement Through Purchasing Social Responsibility in Thailand

This research aims to understand the performance of purchasing social responsibility (PSR) through moderating effect of purchasing strategic integration. The results show that PSR directly influences purchasing performance, while the relationship between PSR and purchasing performance is partially mediated by organizational learning. Moreover, strategic integration negatively moderates the relationship between PSR and purchasing performance. This study suggests that the adoption of PSR affects the operations of both buyers and suppliers in a supply chain that further encourage organizational learning and increases purchasing efficiency. The results also show that organizations may realize this effect of PSR practices but may focus on other purchasing practices, which affects purchasing performance. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.