Accompanying the development of economy, multinational enterprises (MNEs), as a role of promoting economic development, may also lead to environmental pollution of host countries. China has become one of the most significant countries in terms of introducing foreign direct investment (FDI), along with which the pollution problem has become serious. Whether the MNEs affect the environment and whether the MNEs in China perform worse than local enterprises attracts more attention. To understand more about it, we creatively build a model of vertical product differentiation, and the result indicates that the environmental performance of MNEs is better than that of local enterprises.
Yang, B. and Chen, J. (2014), "Are Multinational Enterprises in China Cleaner or Dirtier than Their Local Counterparts?", Globalization and the Environment of China (Frontiers of Economics and Globalization, Vol. 14), Emerald Group Publishing Limited, Bingley, pp. 97-107. https://doi.org/10.1108/S1574-871520140000014005
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