exploring the antecedents of logistics social responsibility a focus on chinese firms fundamental research funds for the central universities 2010221025 2011221016 national natural science foundation of china 70802052 academic outstanding youthful research talent plan of fujian province ja10001s national research foundation for doctoral program of higher education of china 20100121120013 national ministry of education of china humanities and social science 10yjc630010 ncet 10 0712

racing to the bottom and racing to the top the crucial role of firm characteristics in foreign direct investment choices this study builds on the pollution haven and induced innovation arguments as explanations for firm behavior with regard to international environmental management and argues both need to be integrated this implies that foreign direct investment is capable of facilitating a race to the bottom and a race to the top simultaneously using novel and detailed data we test whether environmental capabilities and weaknesses and other characteristics affect us firms foreign direct investment choices in chinese provinces with more or less stringent environmental regulation this enables a more detailed analysis by allowing country regulation to vary spatially and over time our study finds that heterogeneity in capabilities and firm size jointly determine foreign direct investment and in doing so shows the simultaneity of a race to the bottom and to the top specifically firms with environmental capabilities invest in more stringently regulated regions and firms with weaknesses are less likely to target such regions these diverging effects are both moderated by firm size which further amplifies each of them our findings underscore the need to integrate pollution haven and induced innovation arguments in a joint analysis they furthermore show the relevance of methodological choices when testing hypotheses integrating the above arguments empirically

public investment and social risk sharing abstract how the government uses market rates of return to discount risky public projects is intrinsic to the efficient allocation of capital and the choice of public investment policy this paper shows that social discount rates for risk can be higher than lower than or equal to private rates previous analyses which argue for one sided rules where social discount rates are always lower or equal to private rates are shown to be inappropriate in general the paper shows in a general model that the difference between the social value of a public project and its market value is determined by the social insurance value that the project has from improving risk sharing relative to the market depending on the project and degree of market imperfection this term can be positive negative or zero explaining the different possibilities for the social evaluation of risk

the determinants of an environmentally responsive firm an empirical approach abstract our empirical results indicate that a firm s formulation of an environmental plan is positively influenced by customer pressure shareholder pressure government regulatory pressure and neighborhood and community group pressure but negatively influenced by other lobby group pressure sources and a firm s sales to asset ratio firms which view environmental issues as important in the next 5 years are also more likely to have a plan relative to the manufacturing sector firms in the natural resource sector are more likely to formulate environmental plans while firms in the service sector are less likely to have plans our results provide insight into how firms react to environmental issues they also offer policymakers a list of determinants which can be used either as an alternative or complement to environmental regulation

japan s policy to reduce emissions of volatile organic compounds factors that facilitate industry participation in voluntary actions abstract existing research on business participation in voluntary environmental programs emphasizes a variety of explanations including regulatory pressure and incentives market pressure self regulation and firm size however most of this literature focuses on cases from north america and europe the contribution of this research is to examine how well this literature applies to a different geographical region and policy context by examining the case of japan s recent policy mix to reduce emissions of volatile organic compounds following revisions to japan s air pollution control law the scientific and policy significance of this case includes a high level of private sector voluntary participation and a sizable reduction in volatile organic compound emissions 44 1 percent moreover the case is related to the major global air pollution priorities of particulate matter and ozone since volatile organic compounds are important precursors of these two secondary pollutants this was also the first case in japan s environmental policy to use a combination of regulatory and voluntary approaches this study draws upon records of official policy discussions data related to relevant industry associations and other primary source documents to test hypotheses on participation in voluntary programs for two relatively large emitting industries with high emission capture rates in japan the chemical and printing industries the results indicate that explanations for the participation of japanese firms are largely consistent with arguments based on north american and european cases regarding regulatory pressure and incentives market pressure and self regulation but only partially consistent regarding the role of firm size the analysis shows that there were similarities and differences in the factors influencing the participation of the two industries which were partly related to industrial associations and industrial structure in addition the results highlight the importance of two points which are less emphasized by existing literature the business government bargaining process and how to maintain the credibility of regulatory threats and avoid regulatory capture several policy implications for the design of voluntary approaches are presented

content protection and transnational monopoly abstract the paper investigates how domestic content requirements imposed on a vertically integrated monopolist affect production and welfare three content schemes are investigated it is shown that a scheme can be formulated which increases the range of intermediate goods as well as the quantity of final good produced this occurs even though the firms production costs are invariably increased by content protection the scheme can also increase domestic welfare

industry self regulation without sanctions the chemical industry s responsible care program industry self regulation the voluntary association of firms to control their collective action has been proposed as a complement to government regulation proponents argue that the establishment of

risk the financial market and macroeconomic equilibrium growing recognition of the importance of stock market phenomena to the real economy underscores the need for models linking exogenous uncertainty asset market performance and the rest of the economy in an optimizing framework without certainty equivalence this paper constructs a three agent model with continuous time stochastic variables uncertain private production and government expenditure and forward looking rational agents the growth rate of output physical capital accumulation financial asset returns and uncertain inflation are determined as functions of the exogenous uncertainty in the economy analysis of the model finds that increased risk associated with government policy often reverses in an explainable way the conventional comparative static predictions of nonstochastic macro models

the role of corporate reputation and employees values in the uptake of energy efficiency in office buildings although office market actors in the united kingdom show a growing interest in energy efficiency the pace of takeup of energy efficient office features is slow previous studies have highlighted the roles of limited direct financial costs and benefits efficiency gaps and market barriers in limiting the rate of technology adoption this study provides further evidence on the importance of these factors but the primary contribution is focused on the role of corporate reputation and on the importance of individuals values in shaping corporate behaviour the paper presents a theoretical framework to explain environmental decision making in firms and we present qualitative evidence drawing from sixteen semi structured individual and group interviews with office market stakeholders in london glasgow and edinburgh the research finds that companies despite gradually becoming more energy conscious still regard energy costs as a negligible part of their business costs nevertheless an increasingly important driver is the reputational gain obtained by corporate businesses implementing sustainable practices all the interviewees agreed that the pace of change in the office market is slow and that only further policy interventions will accelerate it

foreign direct investment with unemployment and endogenous taxes and tariffs it is well known that high tariffs can induce foreign direct investment or tariff jumping this paper analyzes tariff jumping in the context of a host government which can set specific tariffs and taxes subject to the credibility constraint that the chosen levels be optimal once capital is irreversibly in place the foreign multinational is assumed to choose its location and level of investment strategically taking into account the induced tax and tariff levels in the presence of unemployment the optimal tariff exceeds the optimal tax for any given level of capital investment leading to foreign direct investment

the relevance of the invoicing currency in intra firm trade transactions abstract this paper extends the invoicing currency literature to the theory of multinational firms even with strong tax credit provisions net payments and receipts associated with intra firm trade usually do not consolidate to zero the statistical behavior of the resulting transactional value is affected by the decision on the invoicing currency thus a carefully chosen invoicing currency can create foreign exchange exposure which offsets some other risks of the firm the paper examines how and under what conditions this insight is relevant to a risk averse multinational enterprise a preliminary empirical study generates evidence which supports our ideas

endogenous transfer pricing and the effects of uncertain regulation abstract a scenario is constructed under which a multinational firm mnf faces a threat of a penalty the probability of which is based on the mnf s transfer price given this scenario the mnf s optimum transfer price could be in the interior and simultaneous interaction of the transfer price and real variables exists increased surveillance of the transfer price makes the mnf move its transfer price towards the arm s length price and checks fiscal abuses but it worsens the international allocation of resources even though the cost advantage of the exporting country increases still the impact on global welfare is ambiguous

see what we want to see the effects of managerial experience on corporate green investments how impartial are managerial decisions this question is particularly concerning when it comes to making green investment decisions in the face of stakeholder pressures when managers respond to stakeholder pressures their personal cognition judgment and past experiences play a role in determining their responses the salience of particular stakeholder claims may be determined by deeply rooted individual preferences this research investigates how a manager s past experiences can influence green investments data are gathered from 247 managers about their past experience and their employer s performance data these data are combined with managerial responses to a vignette based experiment which required managers to make green investments based on a decision scenario where they are exposed to different types and strength of stakeholder pressure from consumers and the community results suggest that managers years of experience their employers financial performance and their employers market performance influence investment decisions even when making decisions under new and different set of circumstances while the employers financial performance influences managers to invest more the employers market performance only influences managers investment in the presence of either high consumer or high community pressure compared to less experienced managers experienced managers invest more in response to consumer pressure but less in response to community pressure practical and theoretical implications of these findings in green management are explored

striving to be green the adoption of total quality environmental management many firms are undertaking environment friendly organizational change by applying the philosophy of total quality management with its emphasis on reducing waste and increasing efficiency their objective is to improve their management of pollution and increase customer satisfaction this article investigates the factors that lead to total quality environmental management tqem by large firms we find that internal considerations stemming from a firm s technical capability size absolute and relative to competing firms extent of operations and volume of past emissions are strongly associated with the tqem adoption decision the first four factors are proxies for the firm s costs and capabilities of adopting tqem while the fifth factor is related to the benefits from increasing efficiency and waste reduction and thus proxies for internally generated demand for tqem the desire to improve a firm s image with customers earning good will with regulators and the anticipation of future regulations do not a

competition and optimal departures from stock market value maximization by firms abstract models of firm decisionmaking under uncertainty have done a good job of explaining the implications of spanning and competitive behavior an opportunity set dominance argument under these conditions predicts the optimality of stock market value maximization this paper reexamines the firm s choice rule assuming competitive behavior but without the restrictive assumption of spanning the resulting rule breaks into two parts consisting of the traditional market value maximization component plus another term depending on the welfare effect of a change in the contract structure necessary and sufficient conditions including spanning for this term to be zero are derived

is environmental governance substantive or symbolic an empirical investigation the emergence of environmental governance practices raises a fundamental question as to whether they are substantive or symbolic toward that end we analyze the relationship between a firm s environmental governance and its environmental management as reflected in its ultimate outcome environmental performance we posit that substantive practices would bring changes in organizations most notably in terms of improved environmental performance whereas symbolic practices would portray organizations as environmentally committed without making meaningful changes to their operations focusing on a sample of environmentally sensitive firms results are consistent with environmental governance mechanisms being predominantly part of a symbolic approach to manage stakeholder perceptions on environmental management having little substantial impact on organizations statistical analyses show mostly that there is no relation between environmental governance mechanisms and environmental performance measured in terms of regulatory compliance pollution prevention and environmental capital expenditures however there is some indication that environmental incentives are associated with pollution prevention interviews with corporate directors shed further light on these results by underlining that environmental governance mechanisms are employed at the board level to protect the organization from reputational and or regulatory harm but are not necessarily intended to proactively improve environmental performance

epa s voluntary 33 50 program impact on toxic releases and economic performance of firms abstract this paper examines the motivations for participation in the voluntary 33 50 program and the program s impact on the toxic releases and economic performance of firms in the u s chemical industry it demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation after controlling for sample selection bias and the impact of other firm specific characteristics this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991 93 the program also had a statistically significant negative impact on the current return on investment of firms but its impact on the expected long run profitability of firms was positive and statistically significant

foreign subsidiary transfer pricing and tariffs in the transfer pricing literature horst 12 concludes that the multinational firm mnf will generally charge a low transfer price ltp while other authors are ambivalent on this question this paper shows that less than whole ownership over the subsidiary generally makes the mnf change its transfer pricing strategy from desiring a ltp to wanting a high transfer price htp the conditions for an htp are fairly broad so that we are more likely to observe it than has been suggested in the literature the mnf literature also presumes that the host country loses revenue due to an htp however this view ignores the effects of tariffs on a government s revenue if tariff revenue is included an htp can increase the host country s revenue

competitiveness and legitimation the logic of companies going green in geographical clusters this study analyzes the logic behind the development of environmental responsiveness in companies that are located in geographical clusters drawing on previous research we contend that competitiveness and legitimation are important sources of variation in these companies environmental responses in particular the companies perceived rivalry competition tracking capabilities interaction with industry associations and network embeddedness influence their competitiveness and legitimation motivations for environmental responsiveness we used structural equation modeling to test these hypotheses on a sample of 251 clustered agricultural firms in spain the results support the hypotheses and provide a number of insights about the underlying motivations behind going green in geographical clusters

effect of corporate economic performance on firm level environmental performance in a transition economy this paper analyzes the effect of corporate economic performance as measured by value added on firm level environmental performance in a transition economy in particular it analyzes this economic performance effect using an unbalanced panel of czech firms for the years 1995 1998 it assesses whether successful economic performance begets or undermines good environmental performance this connection seems especially important in transition economies since firms are dramatically restructuring their economic management approaches during transitional periods a majority of the analytical results indicate that successful economic performance undermines good environmental performance possibly indicating that more focused managerial efforts to improve economic outcomes may distract efforts to manage environmental matters better

determinants of proactive environmental management practices in indian firms an empirical study abstract the present study aims to empirically determine the primary factors that have a major influence on adoption of environmental management practices in indian firms for this purpose a theoretical framework has been proposed based on previous studies and a pilot survey that provides broad and specific variables that might have an impact of these practices this impact has been investigated by conducting factor analysis and stepwise regression analysis in order to collect the primary data a questionnaire has been designed for which 104 valid responses 8 5 response rate have been obtained the study reveals that internal holder ship and employees and market commercial buyers and suppliers of goods and services pressures are the significant drivers who govern the adoption of proactive environmental management practices however the external pressures from regulatory and societal stakeholders were not found to be important in the indian context the analysis further showed that firm s characteristic also play a significant role in defining the positive behavior of firms as large firms are more proactively engaged in environmental management initiatives moreover firms in the manufacturing chemical and agriculture sector are likely to have more comprehensive environmental management practices compared to the service sector

dealing with uncertainties when governing csr policies as corporate social responsibility involves a voluntary business endeavour to address social and environmental issues beyond legal compliance governments cannot fall back on hierarchical command and control policies to support it as such it is complementary with the increasing popularity of public policies known as new governance policies where the government is engaged in a horizontal inter organizational network of societal actors and where public policy is both formed and executed by the interacting and voluntary efforts from a multitude of stakeholders however such policies are known to generate substantive uncertainty about the content of csr and its related issues strategic uncertainty regarding the behavior of the actors involved and institutional uncertainty related to the interaction process involved in the institutional change we explore new governance policy instruments to address these uncertainties in the context csr and discuss the experiences with these methods in the european union

what determines the inclusion in a sustainability stock index a panel data analysis for european companies this paper examines the determinants of the inclusion of european companies in the dow jones sustainability world index and the dow jones stoxx sustainability index in doing so the paper contributes to the micro econometric literature analyzing the determinants and economic effects of sustainability performance in three respects first it examines a broad measure of corporate sustainability behavior and thus does not only apply narrow measures of environmental performance such as toxic releases which is common in other studies second the paper examines the effect of internal assessment processes regarding corporate sustainability performance by an independent financial service institution finally it analyzes the influence of unobserved heterogeneity in the framework of panel data models the analysis shows that the probability for an inclusion in the sustainability indexes strongly decreases if a company does not respond to the written survey of the assessing institution furthermore time invariant random effects and an autoregressive structure in the stochastic components are important factors in contrast a significant influence of past economic performance cannot be confirmed robustly

frontrunners and laggards the strategy of environmental regulation under uncertainty the extant literature on the political economy of environmental regulation does not provide a unified theoretical explanation for three salient stylized facts first companies voluntarily invest to reduce the environmental burden that they cause under threat of regulation second ex ante estimates of the compliance cost tend to be systematically higher than ex post estimates finally regulators use limited information provided by the industry i construct a game theoretic model of environmental regulation under uncertainty with a benevolent regulator in equilibrium companies undertake voluntary action to induce regulation that raises barriers to entry this profit driven behavior is not always socially detrimental however as the regulator obtains a credible commitment to production and a more accurate estimate of the compliance cost additionally the results provide a selection explanation for the mismatch between ex ante and ex post cost estimates if companies condition compliance on the installation cost only low cost companies install in equilibrium the analysis combines regulatory capture with social welfare maximization to explain the curious combination of voluntary action and low ex post compliance cost without serious information collection by the regulator

perverse intra firm trade this paper shows that linkages between domestic costs and direction of intra firm trade break down when the multinational firms mnfs face tax rate differentials thus in the context of mnfs conclusions drawn on the assumption of equal or nonexistent tax rates cannot be assumed to extend to the general case of unequal tax rates further saving on profit taxes itself can be a powerful motive for internalisation

voluntary pollution reductions and the enforcement of environmental law an empirical study of the 33 50 program abstract this paper studies determinants and effects of firms participation in the 33 50 program which is a voluntary pollution reduction vpr program initiated by government regulators we examine a wide range of explanations for voluntary corporate environmentalism and find evidence in support of an enforcement theory that predicts that 1 vpr participation is rewarded by relaxed regulatory scrutiny 2 the anticipation of this reward spurs firms to participate in the program and 3 the program rewards regulators with reduced pollution we also find that 33 50 participation was more likely for firms operating in states with larger environmentalist constituencies

production and risk leveling in the intertemporal capital asset pricing model this paper extends merton s intertemporal capital asset pricing model with multiple consumers to include a description of the supply of traded securities the production decisions of firms are described in a model with stochastic investment opportunities and incomplete markets firms maximize the welfare of their stockholders based on the sum of dollar values placed on the projects by shareholders of the firm the monetary value to stockholders of a marginal change in the contract structure due to changing firm production is analyzed in this setting the competitive market achieves an appropriately defined nash constrained pareto optimum sufficient conditions for investor unanimity market value maximization by firms and the equilibrium to achieve a constrained pareto optimum and full pareto optimum are derived when a firm changes its production plan it alters the stochastic nature of its future profits and changes the set of available securities therein lies the firm s problem for valuing its action if markets are incomplete its proposed choice viewed as a welfare issue must involve the welfare effects of the new contract structure relative to the original set of contracts as well as profitability at prevailing prices such a consideration does not arise in perfect markets since the set of contracts being always complete is unchanged before and after any production decision to illustrate take the following example from research firms which specialize in r d in genetic engineering investors currently can invest in such a firm let us say genentech and expect returns whose size will be determined by the fortunes of new techniques in gene splicing let such firms now remove all of their capital from genetic engineering and invest it in equally valuable stocks such as ibm and general motors and so on what will be the effect of this on genentech stockholders should they wish to redistribute their portfolio to suit

the reputational penalties for environmental violations empirical evidence abstract this paper examines the sizes of the fines damage awards remediation costs and market value losses imposed on companies that violate environmental regulations firms that violate environmental laws suffer statistically significant losses in the market value of firm equity the losses however are of similar magnitudes to the legal penalties imposed and in the cross section the market value loss is related to the size of the legal penalty thus environmental violations are disciplined largely through legal and regulatory penalties not through reputational penalties

environmentally benign manufacturing observations from japan europe and the united states abstract a recent international panel study gutowski t murphy c allen d bauer d bras b piwonka t sheng p sutherland j thurston d wolff e wtec panel report on environmentally benign manufacturing ebm 2000 on the web at http itri loyola edu ebm and http www wtec org ebm finds environmentally benign manufacturing ebm emerging as a significant competitive dimension between companies with differing views on future developments companies especially large international companies are positioning themselves to take advantage of emerging environmental trends among japanese companies visited the panel observed an acute interest in using the environmental advantages of their products and processes to enhance their competitive position in the market in the northern european countries visited the panel saw what could be interpreted as primarily a protectionist posture that is the development of practices and policies to enhance the well being of eu countries that could act as barriers to outsiders in the u s the panel found a high degree of environmental awareness among the large international companies most recently in response to offshore initiatives mixed with skepticism in this article we survey ebm practices at leading firms rate the competitiveness of the three regions visited and close with observations of change since the study based upon these results major research questions are then posed in sum the study found evidence that u s firms may be at a disadvantage due in part to a lack of coherent national goals in such areas as waste management global warming energy efficiency and product take back

exploring new ways of assessing the effect of regulation on environmental management abstract studies indicate that while a variety of factors positively influence voluntary environmental management regulatory pressures are among the most important however most research examines samples representing large manufacturers or single industries essentially assuming a level of regulatory constraint using a sample of heterogeneous facilities this study finds that facilities can be classified according to the level of regulatory constraint and that group membership impacts the choice of environmental management strategy when assessed within a utility maximization framework more extensively regulated facilities implement more individual environmental management practices but participate in fewer formal voluntary environmental programs veps compared to other facilities

pricing policies of multinational enterprises host country regulation and welfare abstract this paper examines host country price regulation policies towards a foreign subsidiary the analysis considers two prices namely the transfer prices charged to the subsidiary and the market price of the subsidiary s products it is shown that host countries should regulate both of these prices regulation of the transfer price alone may induce an increase in the subsidiary s market price and cause a loss of host country welfare regulation of both prices is more efficient for it enables the host country to attain a higher level of welfare and allows the foreign firm to earn the same level of profits as would regulation of only one of those prices