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The literature on foreign direct investment (FDI) and the environment has paid little attention to the role of home country factors in shaping the global practices of multinational enterprises (MNEs). By analyzing the interface between FDI and the environment from a Danish perspective, this chapter seeks to cast light on this issue. Denmark is a small, highly open economy dominated by small and medium-sized enterprises servicing specialized niche markets for consumer products or large industrial customers. What makes the case of Danish FDI in developing countries interesting from an environmental perspective is that environmental issues for the past three decades have had an exceptionally strong position on the Danish political agenda and have earned Danish environmental regulation a reputation as among the toughest in the world. The question is whether and how this strong environmental home base has spilled over into the environmental practices of Danish MNEs in developing countries. The chapter describes how the issue of corporate environmental responsibility in developing countries reached the Danish agenda with great force in the late 1990s, embroiling a number of Danish MNEs in damaging public battles. The chapter then moves on to review the – embryonic – literature on environmental practices of Danish MNEs. The chapter concludes by discussing whether and how the environmental practices of Danish MNEs may be traced back to distinct aspects of the Danish home country context.

This paper proposes an efficient test designed to have power against alternatives where the error correction term follows a Markov switching dynamics. The adjustment to long run equilibrium is different in different regimes characterised by the hidden state Markov chain process. Using a general nonlinear MS-ECM framework, we propose an optimal test for the null of no cointegration against an alternative of a globally stationary MS cointegration. The Monte Carlo studies demonstrate that our proposed tests display superior powers compared to the linear tests. In an application to price-dividend relationships, our test is able to find cointegration while linear based tests fail to do so.

This study examines the effects of a firm’s corporate social responsibility (CSR) initiative on its employees’ organizational attachment and intent to leave. We propose that employees’ perceived authenticity of their firm’s CSR activity mediates the effects of a firm’s CSR initiative on employees’ attachment to the firm and intent to leave. We also hypothesize that employees understand the authenticity of their firm’s CSR initiative based on internal and external attribution mechanisms. We propose that internal attribution enhances authenticity, while external attribution reduces it.

We surveyed a sample of 450 employees from 38 Korean companies that were included in the 2009 Dow Jones Sustainability Index Korea (DJSI Korea). To test the theoretical model, we employed a linear structural equation modeling which allows the causal estimation of theoretical constructs after taking into account their measurement errors.

As predicted, internal attribution significantly increases employees’ perceptions of their firm’s CSR authenticity, whereas external attribution significantly reduces such perceptions. Employees’ perceptions of authenticity, in turn, increase their affective attachment and decrease their intent to leave. In addition, the effects of the two attribution mechanisms on organizational attachment and intent to leave were mediated by employees’ perceptions on authenticity.

Research on authenticity has been case studies or narrative ones. This is one of the first studies investigating the role of authentic management empirically.

We demonstrate that a firm’s CSR initiative is a double-edged sword. When employees perceive inauthenticity of their firm’s CSR initiative, the CSR initiative could be detrimental to employees’ attachment to the firm. This study calls attention to the importance of authentic management of CSR.

Informational transparency through social network services become the foundational reality to the contemporary management. To maintain competitive edge in this changing world, every stakeholder of a firm including managers, employees, customers, shareholders, government, and communities should collaborate and help each other live the principle of authenticity.