The impact of value added for US multinationals in European Countries on climate activities using the Driscoll and Kraay estimator

Cavlak, Hakan; Özcan, Sami; Çelik, Ali Kemal

doi:10.22059/jcountst.2025.403133.1371

The impact of value added for US multinationals in European Countries on climate activities using the Driscoll and Kraay estimator

Document Type : Original

Authors

¹ Department of Accounting and Finance, Faculty of Economics and Administrative Sciences, Ardahan University, Ardahan, Türkiye.

² Department of Quantitative Methods, Faculty of Economics and Administrative Sciences, Ardahan University, Ardahan, Türkiye.

10.22059/jcountst.2025.403133.1371

Abstract

This study examines the impact of U.S. multinational corporations (MNCs) on the climate actions of European countries, with a focus on SDG 13 (climate action). Using panel data from 2009 to 2021, the analysis investigates whether the value added generated by these companies influences host countries’ climate performance. The empirical results reveal a significant negative relationship between US MNCs’ value added and the SDG 13 score of host countries. These findings support the Pollution Haven hypothesis, which suggests that MNCs may relocate pollution-intensive operations to countries, thereby increasing environmental risks. Conversely, the Pollution Halo hypothesis posits that MNCs can transfer green technologies and best practices to host countries, potentially improving environmental outcomes; however, this effect was not observed in the current study. Overall, the research contributes to the limited literature quantitatively assessing the macro-level impact of MNCs on sustainable development and climate action, highlighting the tension between economic contributions and environmental responsibilities.

Keywords

Main Subjects

Economics

موضوع: اقتصاد، مالی

حوزة موضوعی: آمریکا، اروپا، محیط‌زیست جهان

Main Object: Economics, Finance

Scope: Europe, USA, world climate

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