Abstract
This study examines whether and how outward foreign direct investment (OFDI) affects firms' domestic environmental performance. We use both the reverse knowledge transfer and resource crowding perspectives to predict the association. Using a sample of Chinese firms, we find that firms' environmental performance improves after the initiation of OFDI, which is consistent with the reverse knowledge transfer perspective. Furthermore, we find that when the host countries of OFDI are developed countries, have stricter environmental regulations, and are characterized by higher values for the long-term orientation and masculinity dimensions of national culture, firms enjoy a further improvement in environmental performance. Our channel tests show that firms' domestic green patent applications and their investment in research and development increase after the initiation of OFDI.
| Original language | English |
|---|---|
| Pages (from-to) | 484-498 |
| Number of pages | 15 |
| Journal | Business Strategy and the Environment |
| Volume | 32 |
| Issue number | 1 |
| Early online date | 31 May 2022 |
| DOIs | |
| Publication status | Published - Jan 2023 |
Bibliographical note
© 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.Keywords
- domestic environmental performance
- emerging markets
- firm outward foreign direct investment
- resource crowding
- reverse knowledge transfer