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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
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    References listed on IDEAS

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    1. 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.
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    4. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    5. 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.
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    10. 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.
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    More about this item

    Keywords

    Environmental protection; foreign ownership; country of origin; multinational enterprises; manufacturing; Germany;

    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

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