What Makes MNEs Greener? The Interplay of Family Ownership and International External Pressures

This study examines how family ownership affects a firm’s climate performance and how this effect is shaped by multinational enterprises’ (MNEs’) exposure to international institutional environments. Drawing on agency theory and the socioemotional wealth (SEW) perspective, we analyze Korean family-owned MNEs, which operate in a domestic context of institutional voids but interact with diverse global regulatory regimes. Using firm-level data on greenhouse gas emissions and foreign exchange-based measures of regional dependency, we find that concentrated family ownership is associated with weaker climate engagement. However, this relationship is context-dependent: internationalization mitigates the adverse effect of family ownership, especially when firms are exposed to environmentally stringent host countries. In contrast, exposure to institutionally lax environments reinforces or fails to offset this negative influence. No significant effects are found for intermediate levels of regulation. These findings show that family firms’ climate behavior is shaped not only by ownership structure but also by transnational institutional pressures. International exposure thus emerges as a potential substitute for weak home-country governance in emerging markets.