New Horizons in International Business series
Edited by John R. McIntyre, Silvester Ivanaj, Vera Ivanaj and Rabi N. Kar
Chapter 2: Are local businesses or MNEs more environmentally sustainable? Some evidence from Asia
Public policy-makers in the developing world face almost irreconcilable policy goals. To reduce poverty they must increase rates of employment and wages. Many developing countries follow policies that lead to rapid industrialization as the fastest path to economic development. With industrialization come the incumbent problems of increasing levels of air, water, and land pollution. Deteriorating air quality puts pressure on policy-makers to reduce pollution. Efforts to reduce pollution may lead to reduced industrial output and lower wages, however. Policy-makers advocating in favor of the environment may struggle against those who see the need for jobs, anti-poverty measures, and wealth creation as more critical goals in the developing world. Revkin (2014) cites examples from London to Los Angeles to Beijing and Delhi to Nairobi to argue that smog and other increases in pollution are an inevitable stage in economic development. He points out that industrial foam that rises from a river in Nairobi bears an eerie resemblance to foam on the banks of the Hudson River in the mid-twentieth century. Revkin’s analysis points out an important question of interest to policy analysts everywhere: Are rising levels of pollution an inevitable consequence of industrialization and the rise from poverty? Can countries rise out of poverty without dramatically increasing their environmental impact?
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