Affiliation:
1. University of Bristol Business School Howard House, Queen's Avenue Bristol BS8, 1SD UK
2. Sheffield University Management School The University of Sheffield Sheffield S10 1FL UK
Abstract
AbstractThis study focuses on climate change regulatory pressures at the national/regional level, which can be considered emergent institutions – newly established and subject to change – in contrast to established institutions. We explore their impact on the environmental sustainability performance of multinational enterprises, advancing beyond the extant literature's focus on their binary compliance reactions. Utilizing a sample of Standard & Poor's 1200 firms, our findings indicate that variations in climate change regulatory pressures at the national/regional level can account for differences in environmental sustainability performance at the corporate level. Moreover, this relationship is moderated by two critical firm characteristics: foreign market exposure and industry carbon intensity. Foreign market exposure, particularly in the context of developing countries, can diminish the positive effects of a home country's climate change regulatory pressures, while industry carbon intensity can amplify these effects.