Research On The Impact Of Institutional Complexity On The Environmental Performance Of Multinational Corporation

In 2021,the actual use of foreign investment in China reaches RMB 1,197.58 billion,an increase of 15.8% year-on-year.With more and more MNCs operating in China,studying their environmental performance will have far-reaching implications for the country’s ecological well-being.MNCs need to operate in different institutional environments and balance institutional requirements from home and host countries,a situation that can lead to different or even conflicting institutional pressures on MNCs.Organizations face institutional complexity when they are confronted with multiple regulations that are logically incompatible with each other.MNCs not only need to pay attention to the institutional constraints of the home country institutional environment,but also the institutional arrangements and stakeholder requirements from the host country are important factors that influence their strategic decisions.In this context,MNCs’ environmental performance in the host country may face the impact of different levels of institutional complexity.Therefore,the core research question of this paper is: how institutional complexity affects MNCs’ environmental performance in host countries.In order to clarify the mechanism of the influence of institutional complexity on MNCs’ environmental performance,this paper distinguishes two dimensions of institutional complexity,including the internal institutional complexity of the host country and the country-level institutional complexity.To address this issue,this paper takes the environmental performance of MNCs above the size in China as the research object and examines the above issues by means of secondary data analysis.First,this paper investigates how the internal institutional complexity of the host country,caused by the complex requirements of different levels of government,affects the environmental performance of MNCs by identifying the government affiliation of MNCs.This paper finds that when MNCs’ government affiliation decreases from central government to local government,MNCs’ environmental emission behavior rises and then decreases,i.e.,government affiliation and environmental performance have an inverted U-shaped relationship,and the foreign ownership of enterprises makes the above relationship more obvious.Second,this paper measures the difference in home country-host country environmental regulation by calculating the difference in the level of pollutant-specific emission reductions between MNCs’ home and host countries,and uses this to study how MNCs respond to the institutional complexity at the country level.This paper finds that home country-host country environmental regulation differences inhibit MNCs’ environmental pollution in the host country.In addition,this paper also finds that the intensity of environmental regulations in the internal region of the host country is also an important factor influencing the environmental performance of MNCs.This paper enriches the research related to corporate environmental management,international business and corporate behavior in complex institutional environments.