Abstract

Will European companies investing abroad be transmitters of EU environmental policies or environmental dumpers? This article utilizes a most-differentcases approach to analyze transnational corporation (TNC) behavior in countries with less stringent environmental standards. Drawing on rational institutionalism, the article examines two significant European business investments in Mercosur countries: paper pulp mills in Uruguay and fishing off the coast of Argentina. These cases demonstrate that EU environmental standards will be diffused beyond Europe's borders if significant fixed assets are involved, high levels of public awareness and action in response to environmental degradation are possible, and if the environmental policy of an industry is successfully implemented in Europe. Paper pulp milling in Uruguay fulfilled these conditions and TNCs, in this case applied EU standards. This was not so with TNC fishing practices in Argentina. Also, with high citizen attention, local companies will adopt similar environmental practices to those of their European counterparts, improving environmental practices even without domestic government regulations.

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