A Study On The Corridor Effect Of Green Management Of Multinational Corporations To Local Enterprises

Since the twenty-first century, global climate change, the destruction of the ecological environment and the sustainable development are attracting attention from academia and the practical field. Multinational company is the main force to promote economic globalization, and has thus become the main responsor of these global issues as well. In order to cope with the diverse stakeholders, or to cultivate the green competitive advantage, many multinational companies have begun to implement high level green management. Because of their powerful economic influences and the capabilities of worldwide resource allocation, multinational companies have gradually infiltrated their environmental behaviors around the world. On the other hand, the original development stage of local enterprises in emerging markets may not yet generally have positive conscious of environmental protection and implementation of green management, but because these local enterprises join in global value chain and build up linkages with multinational companies, they move up or accelerate to meet the international standards of green management, this paper name this phenomenon "green management spillover". Such spillover effects are positive for social, economic and enterprise development in China, so the study of this phenomenon has theoretical and practical value.Previous literatures focus more on the influence of multinational corporations on world economy or technology innovation, but less on social responsibility, especially in environmental protection. The purpose of this paper is to study the spillover channels of green management from multinational companies to local enterprises, mainly including the following issues:what are the green management spillover channels from multinational companies? What is the mechanism in the green management spillover? Is there any factors that will promote the development of local enterprises’green management? What kind of role do government and non-profit organizations play in these channels?Based on literature review, this paper uses resource dependency theory to analyze the mechanism of multinational companies influences on local enterprises green management, analyze the unique position of multinational companies in the supply chain, and also analyze the use of customer resources, public relations resources as well as the government policy resources to influence local enterprises’green management. Next, this paper has built a conceptual model of the spillover channel from multinational companies to local enterprises of green management, analyzing the influences of horizontal linkage, backward linkage and forward linkage on local enterprises’ green management. And this paper also analyzes the moderate effects of three variables-absorptive capacity, the intensity of competition in the industry and industry pollution levels-on the spillover channels.This paper then employs economics game theory and numerical simulation to analyze the horizontal, backward and forward linkages of green management spillover. The result shows that multinational companies will promote green management of local enterprises, and consumer acceptance of green performance as well as the government standard setting, will promote green management of local enterprises, but if there are competitors to imitate the green management and carve up market share, the enthusiasm of local enterprises to implement green management will be reduced.In order to test the reality of the conceptual model, this paper uses dynamic panel data model to empirically test the hypothesis made in the conceptual model. The conclusions are:(1) Horizontal, backward and forward linkages with multinational companies have positive impacts on local enterprises green management. But this positive effect is not significant in the current period, and shows the significance in the lag period.(2) The green management absorptive capacity of the local enterprise has positive moderate effect on the green management spillover through the horizontal and backward linkage, but is not significant for the forward linkage. The reason for the insignificance may because in the forward linkage, there are more cooperative content in green management, such cooperation usually is more cutting-edge, a low level of local enterprises green management has less supportive of this cutting-edge green management cooperation.(3) The moderate effect of the intensity of competition is not significant, this may because although green management can bring long-term core competitive advantage for enterprises, the implementation of the early green management investment is large, and enterprises in these industries also need to consider the cost factor.(4) The moderate effect of industry pollution levels for backward linkage is not significant, and for horizontal and forward linkages, it has negative moderate effect. This result is contrary to the hypothesis in the conceptual model, the reason may because there are some multinational companies still regard China as a "pollution haven", and transfer the high pollution, high energy consumption industries to China, and it also because the cost for green management in more polluted industries are also higher, companies may be reluctant to carry out the high green investment.The possible innovation in this paper includes:(1) Raise the concept of green management spillover for multinational companies, which is a reference and breakthrough from technology spillover, and build the theoretical model including the three spillover channels-horizontal, backward and forward linkages-which is an extension of foreign direct investment theory.(2) Green order effect is also a conceptual innovation, this paper uses resource dependency theory to study the green order effect in the promotion of green management, which enriches the interpretation of firm strategy theory.(3) For research method, this paper combines game theory and empirical analysis, which describe the reality, but also provide the possible optimal solutions for the future company development, making the research more accurate and complete. Particularly through the methods of game theory, this paper interpretes the mechanism and affecting variables of green management spillovers effect, which helps to understand the relationship between different variables, and the use of game theory may create some innovations in multinational companies theory.Due to the researcher’s academic level and research conditions, there are still many inadequacies in this paper and the last part of this paper discuss the limitations as well as the possible future research directions.