Globalization and voluntary environmental management in developing countries

Madhu Khanna, Yuan Liao

Research output: Contribution to journalArticle

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.

Original languageEnglish (US)
Pages (from-to)138-163
Number of pages26
JournalFrontiers of Economics in China
Volume9
Issue number1
DOIs
StatePublished - 2014

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Keywords

  • export-oriented firms
  • foreign direct investment
  • ISO 14001
  • public disclosure programs
  • voluntary programs

ASJC Scopus subject areas

  • Economics and Econometrics

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