1st Edition

Institutional Ownership and Multinational Firms Relationships to Social and Environmental Performance

By James J. Kennelly Copyright 2000
    136 Pages
    by Routledge

    136 Pages
    by Routledge

    This study represents a rare empirical test of the assertions of critics of multinational corporations (MNCs), who argue that firm-level social and environmental performance suffers as MNCs grow increasingly mobile and subject to the short-term financial demands of institutional investors. Such critics argue that 'footloose' and 'stateless' MNCs have not only divorced themselves from a particular sense of responsibility to their home countries, but have also fallen increasingly under the sway of the 'myopic' demands of institutional investors.
    Using multiple regression analysis, the study considered the impact of various levels of multinationality and institutional ownership on the social and environmental performance of US-based manufacturing companies. Based on this empirical analysis, the radical critique of MNCs was not supported. Rather, the level of multinationality of firms was positively associated with social and environmental performance in the home country. This is a far cry from the demonized view of MNCs proffered by the critics. These findings suggest the possibility that MNCs may even have a positive influence on the development of a global economy that is consistent with the values and intent of vision of sustainable development. Ultimately, the study suggest that at a minimum, more attention should be paid to utilizing talents and competencies of MNCs in support of furthering positive social and environmental agendas.

    (Ph.D. dissertation, New York University, 1996; revised with new preface and index)

    List of Tables
    Preface

    1. Introduction

    Research Purpose

    Importance of Topic

    Organization of the Book

    2. Issues in Corporate Social and Environmental Performance
    The Concept of Corporate Social Performance (CSP)
    Theories of Corporate Social Performance
    The Stakeholder Perspective
    Unpacking the CSP Construct


    3. Multinational Advantages
    Multinationality as Competitive Advantage

    Multinational Corporations, Nation-States and Social
    Performance
    Measurement of the Multinationality Construct
    Hypothesizing the Implications of Level of Multinationality on Social and Environmental Performance

    4. Institutional Ownership and Market Myopia
    Trends in Institutional Ownership
    Myopic Institutions and Efficient Markets
    Empirical Evidence
    Institutional Ownership Hypothesis

    A Note on the Institutional Ownership Construct

    Sample and Methodology
    Sample Selection
    Measurement and Operationalization
    Analytical Techniques
    6. Research Results
    Univariate Analysis
    Bivariate Analysis
    Factor Analysis of Multinationality Variables
    Factor Analysis of Social and Environmental Performance Variables
    Hypotheses Tests
    Degree of Multinationality
    7. Discussion and Conclusions
    Impacts of Level of Firm Multinationality
    Impact of Institutional Ownership on Social and Environmental Performance
    Conceptualization and Measurement of Level of Multinationality
    Scope and Limitations

    Contribution and Conclusions
    Tables
    References
    Index

    Biography

    James J. Kennelly