The Impact of Foreign Ownership on Sustainable Practices A Case Study of Chinese Ownership in Swedish Organizations

Abstract

The increase in global trade and its power to transfer knowledge, innovation and ideas across borders plays a significant role in the advancement of sustainable development. Multinational enterprises (MNE) are important parties in reaching sustainability goals, as they have the resources to contribute to sustainable transformation. MNEs operates internationally, where countries have different capabilities, regulations and policies, which can influence how sustainability is viewed and implemented. It is therefore important to examine how foreign ownership influence sustainability practices in a focal firm. To examine this, the case selection involved four Swedish firms who has gained Chinese ownership during the past 15 years. The countries were chosen due to their approach of sustainability and regulations as well as the increased Chinese investments in Sweden. The empirical findings showed that the Chinese investment in the Swedish firms aligns with Made in China 2025 and Belt and Road initiative, while the Swedish firms primarily gained financial resources. While some influence on human resources was observed, the Chinese ownership did not significantly impact the firm’s sustainability practices. This limited impact is attributed to the strict sustainability regulations in Sweden and European Union. An unanticipated finding emerged, showcasing the pace of difference between the Swedish and the Chinese management. The Chinese owners operate faster which accelerated the decision-making process, which in some instances resulted in increased sustainability investments.