Environmental Regulations and Corporate Strategy

For many firms, the opening-up of trade barriers meant unwelcome exposure to tough international competition. In order to protect themselves, many turned to local and national environmental regulations, forming coalitions which enabled them to force out their opponents, even though they were often contravening international environmental agreements in doing so. With the recent emergence of international trade and environment regimes wielding substantial powers, however, comes the opportunity for outward-facing and innovative firms to utilize these regimes and so challenge the discriminatory obstacles which have been becoming ever more common. This adherence to environmental regulations has promoted a broad array of corporate strategies; a fact most visible in North America where firms are making use of the North American Free Trade Agreement (NAFTA). In Environmental Regulations and Corporate Strategy, the authors develop a model of complex institutional responsiveness and demonstrate how this can guide firms through this new era of opportunities for international regulatory capture. They apply the model within North America, identifying the implications for Europe and Asia. Their work is based on 300 confidential interviews with senior executives and officials in North American and European companies, national governments, and North American institutions, and analyses 24 cases of firms who have either benefited or suffered from involvement with international institutions.

Alan Rugman is Thames Water Fellow in Strategic Management, Templeton College, Oxford University. Previous positions have included Professor of International Business at Delhousie University (1980-87) and Professor of International Business at the University of Toronto (1987-98). He has also been a Visiting Scholar and a Visiting Professor at a number of international institutions. Julie Soloway is a Fellow of the Centre for International Studies, University of Toronto. She is currently Research Coordinator for the NAFTA Trade and Environment project. John Kirton is Associate Professor of Political Science, Research Associate of the Centre for International Studies, and Director of the G7 Research Group at the University of Toronto.