Climate change mitigation and internationalization: The competitiveness of multinational corporations

In recent years, the debate about climate change and the competitiveness of multinational corporations (MNCs) has increased. Decision-makers in MNCs often face ambiguities on how their business competitiveness could be impacted by their actions to mitigate climate change. By combining knowledge from the field of climatology with the management literature, this study suggests that climate change mitigation can enhance an MNC’s competitiveness. We test the hypotheses using longitudinal panel data on US MNCs from 2001 to 2009. We find that MNCs that implement climate change mitigation are likely to see significant increase in sales effectiveness and product leadership, but no significant increase in return on equity. Further, the positive influence of mitigation on sales effectiveness and product leadership is found to be more strongly positive when the MNC’s internationalization is high. Hence, mitigation efforts positively impact at least two dimensions of competitiveness — sales effectiveness and product leadership, particularly when internationalization is high.