In Chapter 7, we empirically test the propositions and hypotheses developed in Ch. 4. Specifically, we examine whether natural disasters, compared to other industrial disasters and terrorist attacks, affect multinational corporations (MNCs) foreign subsidiary investment. We also analyze if this effect varies in response to different sub-types of natural disasters. Then, we test if stronger institutional environments moderate the relationship between disasters and foreign subsidiary-level investment. We test our hypotheses using a panel dataset that includes 31,285 observations from 71 European Fortune Global 500 MNCs and their subsidiaries operating across 101 countries during the period 2001–2006. Our findings indicate that MNC foreign subsidiary investment is likely to decrease in response to severe terrorist attacks or technological disasters but not natural disasters, except for the case of windstorms and related water surges, the deadliest weather-related natural disasters. For natural disasters, the likelihood of MNC subsidiary-level disinvestment increased with higher host country democratic freedoms and decreased with higher host country’s regulatory enforcement quality.

In Chapter 2, we build on resilience theory to provide a framework of analysis to understand how the intensity of nature adversity generated by climate change affects and limits business adaptation. Adaptation responses can span a broad range of strategies beginning with unawareness to deliberately ignoring nature adversity conditions. Next, protective adaptation –seeking to preserve the status quo of core business features- including substitution of nature’s resources and services, buffering from negative conditions, government lobbying, and engaging in alliances or mergers and acquisitions. And then, at the highest levels of nature adversity: adopting diversification strategies (e.g., in terms of products/services, industry participation, and geographic location) or even abandoning businesses altogether.

In this chapter we discuss our main findings, and limitations, outline a future research agenda, and propose implications for business managers and policy makers. One of our book’s key findings indicates that firms tend to exhibit lower degrees of protective adaptation at both lower and upper range levels of nature adversity intensity while displaying greater levels of protective adaptation at medium levels, yielding an inverted U-shaped relationship. Our book findings also challenge the commonly accepted wisdom that managers employ a risk calculus where the firm’s response would be in proportion to the loss of life and the duration and severity of a disaster. Between 2001 and 2006, the average number of individuals killed around the world by natural disasters, 757 deaths per year per country on average, was about 190 times greater than the number of fatalities for from terrorist attacks, and about 10 times greater than for deaths from technological disasters Yet, we only found that only more severe terrorist attacks and technological disasters significantly decreased MNC foreign subsidiary investment. Alternatively, natural disaster severity does did not appear to affect MNC foreign subsidiary investment.

Chapter 6 focuses on two key research questions highlighted in Chapter 3: How does nature adversity intensity affect the adoption of business protective adaptation strategies? And how do firm-level and institutional-level factors moderate the relationship between nature adversity intensity and protective adaptation? In this chapter we also test the propositions developed in Chapter 3. To do this, we study how the U.S. ski industry has adapted to warmer temperatures between between 2001-2013. Our data tracks snowfall and temperature conditions for western U.S. ski resorts between 1995-2013. Our findings show that firms facing medium nature adversity intensity levels (measured in terms of temperature) appear more likely to engage in higher adaptation while those experiencing low and high natural adversity intensity show a tendency for lower adaptation, yielding an inverted U-shaped relationship. Our findings also suggest that firm age, the stringency of the regulatory environment, and the presence of slack resources, induce a flattening of this inverted U-shaped relationship. Status as a public company, however, induces a steepening of the inverted U-shaped relationship.

The chapter summarises the main findings of the volume and illustrates possible venues, and their limitations, in the regulation of VSS.

Chapter 2 studies VSS in relation to public authority and their possible complementarity with public rules at the international and EU/national level. The interactions between VSS and public authority are illustrated with reference to EU practice. These regulatory forms, labelled as public use and facilitation of VSS, result in collaborative rule-making and coordination of regulatory effects between public and private regimes. As an outcome of these interplays, public and private regimes are mutually influenced in a process of hybridisation. The chapter illustrates the limits to complementarity that emerge from assessing VSS under WTO rules, in particular when it is taken into account that VSS emerged as a response to the perceived WTO constraints on public action. The chapter then sets the coordinates of a role for public authority towards VSS. Literature on global public goods, transnational law and global governance clarifies normatively the level of public intervention vis-à-vis VSS. The chapter also illustrates how provisions of EU competition law, free movement and WTO law can discipline VSS, and highlights the main outstanding legal issues that will be addressed.