International Business and the Environment

This article addresses the literature on multinational enterprises' (MNEs') and the environmental conduct of the global supply chain, their environmental impact upon host nations, and the governance of their environmental conduct in the global economy. It concentrates on international business (IB) research. It evaluates relevant studies from the economics and international political economy literature. Differences in the availability of resources across countries are fragmenting forces that lower the global standardization of MNEs' environmental strategies. MNEs tend to have strong bargaining power in pre-entry negotiations with host governments. MNE subsidiaries in emerging economies can have broader effects on local firms' environmental conduct. IB research presents many potential ways to expand the understanding of how MNEs and global supply chains affect the natural environment and how these impacts can be regulated in the global economy, and about MNEs' role in shaping external pressures for environmental protection. Finally, three areas for future IB research on environmental issues are reported.