Away From Headquarters: Corporate Establishments' Hierarchical and Geographic Position and Their Environmental Impacts

• In Event: 466 - Regular Session. Organizations and Communities

Abstract

This article examines the relationship between the organizational characteristics of large firms’ corporate establishments and their environmental impacts. Specifically, I shed light on the hierarchical and geographic positions of corporate establishments in the company as large companies own their business operations at numerous locations and structure them as a multi-tiered hierarchical form. Using a sample of 71 chemical manufacturing companies and their more than 20,000 corporate establishments in the US, this article addresses three research questions: (1) How are the hierarchical and geographic positions of corporate establishments associated with the probability of carrying out pollution-generating industrial activities? (2) How are the hierarchical and geographic distances of manufacturing plants from headquarters related with degrees of environmental pollution? and (3) How do the regulatory effects of state environmental policies vary depending on the relationship of manufacturing plants to their corporate owner? My multilevel statistical analysis demonstrates that companies are likely to assign environmentally hazardous activities to corporate establishments that are geographically distant from headquarters and that occupy a lower position in the corporate hierarchy. With respect to environmental performance, higher levels of environmental pollution were generated in manufacturing plants that are hierarchically distant from their headquarters. In addition, non-local plants operating in pro-environmental states caused greater environmental hazards than local plants, partly because state environmental policies have marginal effects on facilities with distant headquarters.

Author

• Juyoung Lee, Brown University