External Intrusion, Internal Tragedy: Environmental Pollution and Multinational Corporations in Sub-Saharan Africa

Abstract

Purpose – This study provides insight on how Sub-Sahara African (SSA) countries can ameliorate the impact of environmental pollution in the face of increasing inflow of multinational corporations (MNCs).Design/methodology/approach – An analytical model describing the role of institutions in reducing the environmental impact of MNCs was formulated and analysed for a sample of 43 SSA countries (1996–2010) using descriptive and the System Generalised Method of Moments techniques.Findings – It was found that the ‘tragedy’ of environmental pollution can be ‘managed’ if there are strong institutional framework especially regulatory quality and government effectiveness that will drive environmental policies and make MNCs to comply to the tenets of corporate social responsibility (CSR) in host countries. The study also established that the environmental hazards in the previous year will occur in the current year, but with strong institutions in place, it will be at a decreasing rate. How increase in trade, inflow of MNCs and population growth affect the current extent of environmental pollution was underscored.Research limitation – Aggregated data on the variables were utilised, and thus the results were dependent on the reliability of the data. Examining how MNCs respond to CSR with respect to environmental issues in SSA can be taken up in future studies using micro-data. This will complement this study and further establish the impact of MNCs activities on the environment in SSA.Originality/value of chapter – The relevance of institutions in regulating the behaviours of MNCs with regards to environmental pollution in SSA was emphasised.

Citation

Osabuohien, E.S., Efobi, U.R. and Gitau, C.M.W. (2013), "External Intrusion, Internal Tragedy: Environmental Pollution and Multinational Corporations in Sub-Saharan Africa", Leonard, L. and Alejandra Gonzalez-Perez, M. (Ed.) Principles and Strategies to Balance Ethical, Social and Environmental Concerns with Corporate Requirements (Advances in Sustainability and Environmental Justice, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 93-118. https://doi.org/10.1108/S2051-5030(2013)0000012010