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Impact of Firm‐Based Environmental Standards on Subsidiaries and Their Suppliers: Evidence from Motorola‐Penang

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  • Michael T. Rock
  • Pao Li Lim
  • David P. Angel

Abstract

How successful are multinational corporations in extending their firm‐based environmental standards to their subsidiaries and those subsidiaries' local suppliers in their global production networks in developing countries? We address this question through an in‐depth case study of how Motorola, a prominent multinational electronics firm with an extensive global production network, is using a set of firm‐based standards to meet several new stringent European Union environmental directives. The case study demonstrates that these firm‐based standards appear to be enabling a major subsidiary and its suppliers in one developing economy to reduce the environmental intensities of their production activities. This finding suggests that the firm‐based environmental standards of multinationals with extensive global production networks might contribute to a leveling up of environmental standards in subsidiaries and their local suppliers, rather than a “race to the bottom”, thus reinforcing the technique or intensity effects associated with open trade, investment, and technology policies.

Suggested Citation

  • Michael T. Rock & Pao Li Lim & David P. Angel, 2006. "Impact of Firm‐Based Environmental Standards on Subsidiaries and Their Suppliers: Evidence from Motorola‐Penang," Journal of Industrial Ecology, Yale University, vol. 10(1‐2), pages 257-278, January.
  • Handle: RePEc:bla:inecol:v:10:y:2006:i:1-2:p:257-278
    DOI: 10.1162/108819806775545484
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    Cited by:

    1. Golgeci, Ismail & Makhmadshoev, Dilshod & Demirbag, Mehmet, 2021. "Global value chains and the environmental sustainability of emerging market firms: A systematic review of literature and research agenda," International Business Review, Elsevier, vol. 30(5).
    2. Stefan Gold & Thomas Chesney & Tim Gruchmann & Alexander Trautrims, 2020. "Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1274-1286, December.
    3. Tong, Xin & Shi, Jin & Zhou, Yu, 2012. "Greening of supply chain in developing countries: Diffusion of lead (Pb)-free soldering in ICT manufacturers in China," Ecological Economics, Elsevier, vol. 83(C), pages 174-182.
    4. Coenen, Lars & Grillitsch, Markus & Hansen, Teis & Moodysson, Jerker, 2017. "An innovation system framework for system innovation policy: the case of Strategic Innovation Programs (SIPs) in Sweden," Papers in Innovation Studies 2017/8, Lund University, CIRCLE - Centre for Innovation Research.
    5. Grillitsch, Markus & Hansen, Teis & Coenen, Lars & Miörner, Johan & Moodysson, Jerker, 2019. "Innovation policy for system-wide transformation: The case of strategic innovation programmes (SIPs) in Sweden," Research Policy, Elsevier, vol. 48(4), pages 1048-1061.

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