An emerging subfield of strategic management is that dealing with the natural environment as it affects corporate strategy. To analyze this we organize the literature on environmental regulations and corporate strategy into a new managerial framework. Next we develop a resource-based view of the interaction between firm-level competitiveness and environmental regulations including the conditions for the use of green capabilities. Finally, we analyze the green capabilities of multinational enterprises within a standard international business model, using firm-specific advantages (FSAs) and country-specific advantages (CSAs). We then use this FSA/CSA configuration to explore hypotheses on environmental regulations, competitiveness, and corporate strategy.