Climate Change Mitigation and Internationalization: The Competitiveness of Multinational Corporations

Thunderbird International Business Review, Vol. 55, Issue 6, pp. 673-688 (2013)

17 Pages Posted: 27 Oct 2013

See all articles by Subrata Chakrabarty

Subrata Chakrabarty

University of Texas at El Paso (UTEP)

Liang (Lucas) Wang

University of Western Ontario

Date Written: 2013

Abstract

In recent years, the debate about climate change and the competitiveness of multinational corporations (MNCs) has increased. Decision-makers in MNCs often face ambiguities on how their business competitiveness could be impacted by their actions to mitigate climate change. By combining knowledge from the field of climatology with the management literature, this study suggests that climate change mitigation can enhance an MNC's competitiveness. We test the hypotheses using longitudinal panel data on US MNCs from 2001 to 2009. We find that MNCs that implement climate change mitigation are likely to see significant increase in sales effectiveness and product leadership, but no significant increase in return on equity. Further, the positive influence of mitigation on sales effectiveness and product leadership is found to be more strongly positive when the MNC's internationalization is high. Hence, mitigation efforts positively impact at least two dimensions of competitiveness — sales effectiveness and product leadership, particularly when internationalization is high.

Keywords: Corporate Social Responsibility, Global Warming, Greenhouse Gas Emissions, Anthropogenic Climate Change, Signaling Theory, Organizational Learning Theory, Utility Maximization Principle

JEL Classification: N5, O13, Q2, Q3, K32, M14, D83, F23, F2, L1, M1

Suggested Citation

Chakrabarty, Subrata and Wang, Liang (Lucas), Climate Change Mitigation and Internationalization: The Competitiveness of Multinational Corporations (2013). Thunderbird International Business Review, Vol. 55, Issue 6, pp. 673-688 (2013). Available at SSRN: https://ssrn.com/abstract=2345746

Subrata Chakrabarty (Contact Author)

University of Texas at El Paso (UTEP) ( email )

El Paso, TX 79968-0539
United States

HOME PAGE: http://chakrabarty.com

Liang (Lucas) Wang

University of Western Ontario ( email )

1151 Richmond Street
Suite 2
London, Ontario N6A 5B8
Canada

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