The environmental performance of firms

In the latest edition of Ecological Economics (out this week) we analyses the relationship between multinationals and the environmental performance of firms.

The unique selling point of this paper is that we are able to take into account knowledge spillovers from human capital to see whether owners of firms that were trained or worked in a multinational take with them better knowledge of environmental management practices and energy efficiency.

This is globalisation and the environment in action.

The environmental performance of firms: The role of foreign ownership, training, and experience

Matthew A. Cole University of Birmingham, United Kingdom
Robert J.R. Elliott University of Birmingham, United Kingdom
Eric Strobl Ecole Polytechnique Paris and SALISES, France

Abstract

In this paper we extend the debate on the environmental implications of foreign direct investment in developing countries by examining a new mechanism through which foreign influence can affect the environmental performance of firms. We focus on the extent to which key workers who have had previous training or experience in a foreign owned firm transfer and utilise their knowledge gained to the benefit of the local previous termenvironment.next term To this end we use detailed firm-level data on manufacturing firms in Ghana. Our econometric results suggest that the foreign training of a firm's decision maker does reduce fuel use, particularly so in foreign owned firms. Foreign ownership per se does not influence fuel use or total energy use but is found to increase electricity use, perhaps the cleanest form of energy used by Ghanaian firms.

Jel classification: Q56; Q52; F21; F23
Keywords: previous termEnvironmentnext term; Spillovers; Foreign Direct Investment

I have a feeling I might have posted on this when the working paper came out - apologies.