Foreign Direct Investment Impact on Emerging and Transition Economies: A Sustainability Perspective

Francisco David Barrote Pinto da Mota, Paula Cristina da Silva Ferreira Neto Rodrigues


Purpose: In this article it is intended to analyze the impact of Foreign Direct Investment on the adoption of sustainability practices in Emerging and Transition Economies. In this context, it is adopted a perspective where value creation encompasses the capacity of an enterprise to generate value to its stakeholders, considering the influence of its activities on the environmental and social domains.

Design/methodology/approach: Accordingly, it was developed a case study that is divided into two parts.

On the first part, it is evaluated social and environmental indicators in Poland, a Transition Economy adopting a comparative perspective that focus on the relative performance of the country in comparison to Portugal, a developed economy. This evaluation was done under the lenses of the Sustainable Development Goals (SDGs) articulated under the 2030 Agenda for Sustainable Development.

On the second part of the study, it was reviewed the impact of multinational enterprises activities on environmental and social welfare. Relative to this, the article adopts a innovative comparative approach, as it is the first study to analyze McDonald’s corporate sustainability practices in two different markets: Poland and Portugal. Besides this, it provides a disruptive analysis on cross cultural sustainability and its impact on international sustainability dynamics, using an approach that focuses on the contribution of Multinational’s Sustainability Practices on the accomplishment of Sustainable Development Goals.

Findings: It is concluded that, under a globally adopted strategy including relevant economic and social agents, that Foreign Direct Investment contributes to enhance environmental and social sustainability. Besides this, it is also highlighted the role of strategy flexibility so that sustainability practices achieve a significant impact on local context as well.

Originality: This study analyses the impact of Foreign Direct Investment in host countries by considering a cross-country sustainability analysis, that focuses on Multinational Enterprises strategic behavior.

Keywords: Foreign Direct Investment, Transition Economies, Sustainability, Environmental and Social Responsibility.

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