Dynamic capabilities and environmental sustainability for emerging economies’ multinational enterprises

Abstract The purpose of this study is to enhance our understanding of how macro (country)—level dynamic capabilities (DC), such as government environmental policies, legal and market requirements, and technological advances, and micro (firm)—level DC, such as organizational size, culture, and managerial characteristics, are related to emerging economies multinationals’ environmental sustainability policies and practices. Limited studies explore linkages between macro-and micro-level DC and environmental sustainability, which urge emerging economies’ multinationals to reconsider their environmental policies and practices in order to compete with enterprises from developed countries. We develop a theoretical framework and offer propositions about the fundamental links between macro and micro DC and emerging economies environmental sustainability efforts. The propositions can be empirically tested in subsequent studies using country-level and firm-level data to examine the interactions between macro-and micro-level capabilities, in relation to sustainable policies and procedures, for multinationals in emerging economies.