A Perspective on Multinational Enterprises and Climate Change: Learning from 'An Inconvenient Truth'?

Abstract

This paper explores whether and how an important environmental issue such as climate change can give MNEs not only the opportunity to develop 'green', firm-specific advantages (FSAs), but also help reconfigure key FSAs that are viewed as the main sources of firms' profitability, growth and survival. We examine the nature and geography of such FSA development, and develop two organizing frameworks, which are subsequently applied to climate change, using information from Global 500 firms. Implications and future directions for IB research are indicated.

Keywords: Firm-Specific Advantages, Capabilities, Capability Development, Location-Bound Knowledge Bundles, Climate Change, Sustainability

JEL Classification: D21, F23, L1, L2, M1, O1, 013, 03, Q2, Q4