Environmental innovation in foreign subsidiaries: the role of home-ecological institutions, subsidiary establishment mode and post-establishment experience

In this study, we argue that foreign subsidiaries of multinational enterprises (MNEs) vary in terms of their engagement in environmental innovation depending on the strength of the MNE's home-ecological institutions. We also propose that the manifestation of this home-institutional effect varies depending on the choice of the subsidiary establishment mode (acquisition vs. greenfield) and over time based on the subsidiaries’ host experience. We test our hypotheses using a sample of foreign subsidiaries in Spain over the period 2003–2015. Our results support the home-institutional effect on subsidiary-level environmental innovation as well as the moderating effects of the subsidiary establishment mode and host experience.