Environmental sustainability practices and offshoring activities of multinational corporations across emerging and developed markets

Research output: Contribution to journalArticlepeer-review

Authors

  • Theophilus A. Lartey
  • Joseph Amankwah-Amoah
  • Albert Danso
  • Samuel Adomako
  • Zaheer Khan

External organisations

  • Leicester Castle Business School
  • Kent Business School
  • University of Bradford
  • University of Aberdeen

Abstract

Using panel data of 1080 multinational corporations (MNCs) from the United States, we examine the effects of environmental sustainability practices on the degree of firms’ offshoring activities. In addition, we disaggregate offshoring activities into their core components depending on whether or not the firm buys (inputs) or sells (outputs) and/or owns assets in a given country and examine the extent to which sustainability practices influence the different components of offshoring decisions. The results indicate that sustainability practices significantly affect offshoring activities of MNCs. In particular, we found that sustainable business practices matter when the firm sells goods or owns assets in the given host nation. Additionally, the results show that the sustainability–degree of the internationalization relationship is crucial for MNCs that have offshoring activities in advanced economies relative to those firms that have activities in emerging markets. Our results are robust to alternative explanations.

Bibliographic note

Publisher Copyright: © 2020 Elsevier Ltd

Details

Original languageEnglish
Article number101789
JournalInternational Business Review
Early online date24 Dec 2020
Publication statusE-pub ahead of print - 24 Dec 2020

Keywords

  • Advanced economies, Emerging economies, Environmental sustainability, Offshoring strategy, Production assets