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Globalization and Voluntary Environmental Management in Developing Countries

Author

Listed:
  • Madhu Khanna

    (Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign. Urbana, IL 61801, USA)

  • Yuan Liao

Abstract

Weak capacity to enforce regulations and sanction violators, and an emphasis on economic growth in developing countries has led to concerns about worsening environmental conditions and the potential for these countries becoming pollution havens for multinational corporations. International environmental standards, voluntary programs, and public disclosure programs have gained popularity because they engage market participants in providing incentives for self-regulation and have the potential to substitute for the lack of domestic regulatory capacity. This paper analyzes the motivations for firms to undertake voluntary environmental management and reviews the empirical evidence on the type of firms participating in such initiatives and their effectiveness in improving environmental performance. We also consider the special case of China that has witnessed dramatic globalization following its acceptance into the World Trade Organization and participation by its firms in global supply chains. We conclude with a discussion of the effectiveness of these efforts as a substitute for weak regulatory and civic society pressures in these countries.

Suggested Citation

  • Madhu Khanna & Yuan Liao, 2014. "Globalization and Voluntary Environmental Management in Developing Countries," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 9(1), pages 138-163, March.
  • Handle: RePEc:fec:journl:v:9:y:2014:i:1:p:138-163
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-003-014-0008-6
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    Citations

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    Cited by:

    1. Golgeci, Ismail & Makhmadshoev, Dilshod & Demirbag, Mehmet, 2021. "Global value chains and the environmental sustainability of emerging market firms: A systematic review of literature and research agenda," International Business Review, Elsevier, vol. 30(5).
    2. Massimo Filippini & Suchita Srinivasan, 2020. "Voluntary adoption of environmental standards and limited attention: Evidence from the food and beverage industry in Vietnam," CER-ETH Economics working paper series 20/338, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    3. Kumar, Surender & Shetty, Shivananda, 2018. "Corporate Participation in Voluntary Environmental Programs in India: Determinants and Deterrence," Ecological Economics, Elsevier, vol. 147(C), pages 1-10.
    4. Massimo Filippini & Suchita Srinivasan, 2022. "Adoption of environmental standards and a lack of awareness: evidence from the food and beverage industry in Vietnam," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(3), pages 307-340, July.
    5. Sam, Abdoul G. & Zhang, Xiaodong, 2020. "Value relevance of the new environmental enforcement regime in China," Journal of Corporate Finance, Elsevier, vol. 62(C).
    6. Zhang, Jinzhu & Liu, Yu & Zhou, Meifang & Chen, Boyang & Liu, Yawen & Cheng, Baodong & Xue, Jinjun & Zhang, Wei, 2022. "Regulatory effect of improving environmental information disclosure under environmental tax in China: From the perspectives of temporal and industrial heterogeneity," Energy Policy, Elsevier, vol. 164(C).
    7. Abdoul G. Sam & Danbee Song, 2022. "Corporate environmentalism and international trade: Evidence from industry‐level data," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1440-1455, September.
    8. Shachi Rai & Sangeeta Bansal, 2015. "Factors Explaining Corporate Social Responsibility Expenditure in India," Review of Market Integration, India Development Foundation, vol. 7(1), pages 37-61, April.

    More about this item

    Keywords

    voluntary programs; ISO 14001; public disclosure programs; foreign direct investment; export-oriented firms;
    All these keywords.

    JEL classification:

    • 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

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