IDEAS home Printed from https://ideas.repec.org/p/lue/wpaper/267.html
   My bibliography  Save this paper

Environmental Protection of Foreign Firms in Germany: Does the country of origin matter?

Author

Listed:
  • John P. Weche Geluebcke

    (Institute of Economics, Leuphana University Lueneburg, Germany)

  • Isabella Wedl

    (Institute for Environmental Communication, Leuphana University Lueneburg, Germany)

Abstract

Only recently have the aspects of pollution and environmental protection entered into the empirical literature about international firm activities. The present paper is the first firm-level study on the link between foreign ownership and environmental protection in Germany. We find that, ceteris paribus, foreign owned firms in Germany are more likely to invest in environmental protection. They also invest on a larger scale in terms of add-on measures as well as integrated measures. These results are robust against different measures, different time periods, different control groups, and selection issues arising from fractional response data. Once we control for productivity levels, the differences become less straightforward. However, the higher probability of foreign firms' making general as well as integrated environmental protection investments and the tilt of their composition towards integrated measures remain. We cannot find any support for differences among foreign firms by country of origin. This can be interpreted as support for the new institutionalist hypothesis of international convergence of management practices in the field of environmental management due to normative pressure and de facto standards at the global level.

Suggested Citation

  • John P. Weche Geluebcke & Isabella Wedl, 2013. "Environmental Protection of Foreign Firms in Germany: Does the country of origin matter?," Working Paper Series in Economics 267, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:267
    as

    Download full text from publisher

    File URL: https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/lue/pdf/wp_267_Upload.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    2. Svetlana Batrakova & Ronald Davies, 2012. "Is there an environmental benefit to being an exporter? Evidence from firm-level data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 449-474, September.
    3. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    4. Alan Collins & Richard I. D. Harris, 2002. "Does Plant Ownership Affect the Level of Pollution Abatement Expenditure?," Land Economics, University of Wisconsin Press, vol. 78(2), pages 171-189.
    5. Alan Collins & Richard I. D. Harris, 2005. "The Impact Of Foreign Ownership And Efficiency On Pollution Abatement Expenditure By Chemical Plants: Some Uk Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(5), pages 747-768, November.
    6. Esmeralda A. Ramalho & Joaquim J.S. Ramalho & José M.R. Murteira, 2011. "Alternative Estimating And Testing Empirical Strategies For Fractional Regression Models," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 19-68, February.
    7. Stefanie Haller & Liam Murphy, 2012. "Corporate Expenditure on Environmental Protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 277-296, February.
    8. Kaiser, Kai & Schulze, Günther G., 2003. "International Competition and Environmental Expenditures: Empirical Evidence from Indonesian Manufacturing Plants," HWWA Discussion Papers 222, Hamburg Institute of International Economics (HWWA).
    9. Aden, Jean & Kyu-hong, Ahn & Rock, Michael T., 1999. "What is Driving the Pollution Abatement Expenditure Behavior of Manufacturing Plants in Korea?," World Development, Elsevier, vol. 27(7), pages 1203-1214, July.
    10. Anne Tempel & Peter Walgenbach, 2007. "Global Standardization of Organizational Forms and Management Practices? What New Institutionalism and the Business‐Systems Approach Can Learn from Each Other," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 1-24, January.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Pratima Bansal, 2005. "Evolving sustainably: a longitudinal study of corporate sustainable development," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 197-218, March.
    13. Michael Konold, 2007. "European Data Watch: New possibilities for economic research through integration of establishment-level panel data of German official statistics," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(2), pages 321-334.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pasquale Marcello Falcone, 2018. "Green investment strategies and bank-firm relationship: a firm-level analysis," Economics Bulletin, AccessEcon, vol. 38(4), pages 2225-2239.
    2. Imbruno, Michele & Ketterer, Tobias D., 2018. "Energy efficiency gains from importing intermediate inputs: Firm-level evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 135(C), pages 117-141.
    3. Stefanie Haller & Liam Murphy, 2012. "Corporate Expenditure on Environmental Protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 277-296, February.
    4. Jurate Jaraite & Andrius Kazukauskas & Tommy Lundgren, 2014. "The effects of climate policy on environmental expenditure and investment: evidence from Sweden," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 3(2), pages 148-166, July.
    5. Roy, Jayjit & Yasar, Mahmut, 2015. "Energy efficiency and exporting: Evidence from firm-level data," Energy Economics, Elsevier, vol. 52(PA), pages 127-135.
    6. Michele Imbruno & Tobias Ketterer, 2016. "Energy efficiency gains from trade in intermediate inputs: firm-level evidence from Indonesia," GRI Working Papers 244, Grantham Research Institute on Climate Change and the Environment.
    7. Ulltveit-Moe, Karen Helene & Forslid, Rikard & Okubo, Toshihiro, 2011. "Why are firms that export cleaner? International trade and CO2 emissions," CEPR Discussion Papers 8583, C.E.P.R. Discussion Papers.
    8. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    9. Barrows, Geoffrey & Ollivier, Hélène, 2021. "Foreign demand, developing country exports, and CO2 emissions: Firm-level evidence from India," Journal of Development Economics, Elsevier, vol. 149(C).
    10. Svetlana Batrakova & Ronald Davies, 2012. "Is there an environmental benefit to being an exporter? Evidence from firm-level data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 449-474, September.
    11. Banerjee, Soumendra Nath & Roy, Jayjit & Yasar, Mahmut, 2021. "Exporting and pollution abatement expenditure: Evidence from firm-level data," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    12. Ronald B. Davies, T. Huw Edwards, and Arman Mazhikeyev, 2018. "The Impact of Special Economic Zones on Electricity Intensity of Firms," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    13. Jaraite, Jurate & Kažukauskas, Andrius & Lundgren, Tommy, 2012. "Determinants of Environmental Expenditure and Investment: Evidence from Sweden," CERE Working Papers 2012:7, CERE - the Center for Environmental and Resource Economics.
    14. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    15. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    16. Joachim Wagner, 2014. "Credit constraints and exports: evidence for German manufacturing enterprises," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 294-302, January.
    17. Zhang, Cheng & Zhou, Bo, 2023. "Where should the money go? The green effect of governmental guidance when sustainable finance impacts brown firms," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    18. Dardati, Evangelina & Saygili, Meryem, 2021. "Are exporters cleaner? Another look at the trade-environment nexus," Energy Economics, Elsevier, vol. 95(C).
    19. Siedschlag, Iulia & Yan, Weijie, 2020. "What drives firms’ decisions to spend on environmental protection," Papers WP670, Economic and Social Research Institute (ESRI).
    20. Jacint Balaguer & Ana Cuadros & Jose García-Quevedo, 2023. "Does foreign ownership promote environmental protection? Evidence from firm-level data," Small Business Economics, Springer, vol. 60(1), pages 227-244, January.

    More about this item

    Keywords

    Environmental protection; foreign ownership; country of origin; multinational enterprises; manufacturing; Germany;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lue:wpaper:267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Wagner (email available below). General contact details of provider: https://leuphana.de/institute/ivwl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.