Article

Investing Up: FDI and the Cross-country Diffusion of ISO 14001 Management Systems

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Abstract

Competition to attract foreign direct investment (FDI) creates opportunities for multinational enterprises (MNEs) to diffuse corporate management practices from their countries-of-origin (home countries) to countries hosting their foreign operations. We examine conditions under which MNEs transfer corporate environmental practices from home countries to host countries. Our focus is on ISO 14001, the most widely adopted voluntary environmental program in the world. We examine inward FDI stocks and ISO 14001 adoption levels for a panel of 98 countries, and a subset of 74 developing countries, for the period 1996–2002. We find support for the country-of-origin argument in that inward FDI stocks are associated with higher levels of ISO 14001 adoption in host countries only when FDI originates from home countries that themselves have high levels of ISO 14001 adoption. Countries’ ISO adoption levels are associated not with how much FDI host countries receive overall but from whom they receive it. Three implications emerge from this study: (1) FDI can become an instrument to perpetuate divergence in corporate practices across the world; (2) economic integration via FDI can create incentives for firms to ratchet up their environmental practices beyond the legal requirements of their host countries; (3) instead of racing down to match the less stringent corporate practices prevalent in developing countries, developed countries can employ FDI outflows to ratchet up corporate practices abroad given that developing countries are net recipients of developed countries’ FDI outflows.

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... 52-66;Deitelhoff and Wolf, 2010a, pp. 212-214;Greenhill, Mosley and Prakash, 2009;Prakash and Potoski, 2007). High-regulating countries are reluctant to regulate their companies outside their territory, the Alien Tort Claim Act of the US and recent UK legislation being rare exceptions (Deitelhoff and Wolf, 2010b: 213;skeptical Ruggie, 2017). ...
... Besides being legally coerced, international firms tend to transport their regulatory standards abroad as these are interpreted as "quality signals" (Potoski and Prakash, 2006) by business partners and customers (Kolk, van Tulder and Welters, 2005;Murphy, 2000;Vogel, 2007;Miura and Kurusu, 2015). Moreover, compliance with diverse standards in heterogeneous regulatory environments creates transaction costs and carries the risk of competitive disadvantages (Greenhill, Mosley and Prakash, 2009;Prakash and Potoski, 2007;Flohr et al., 2010;Perkins and Neumayer, 2012). German automotive firms, for instance, apply German environmental regulation in South Africa to level the playing field (Thauer, 2014a). ...
... As a result, environmental and human rights norms have started to creep into the core business of many companies (see e.g. Börzel et al., 2011;Prakash, 2006, Prakash andPotoski, 2007;Héritier et al. 2009;Flohr et al., 2010). "Corporate social responsibility" requires firms to integrate environmental norms into their production, management, and general business practices. ...
Chapter
In dieser Festschrift für Harald Fuhr behandeln Weggefährtinnen und Weggefährten unterschiedlicher beruflicher Stationen eine große Bandbreite an Themen aus sozialwissenschaftlicher Perspektive in drei Feldern: 1 Unter der Überschrift „Entwicklung und Verwaltung“ sind Beiträge gefasst, die sich wie Harald Fuhr mit der Frage auseinandersetzen, wie Entwicklung gefördert sowie Ungerechtigkeiten behoben werden und Verwaltungen auf lokaler, nationaler und globaler Ebene dazu beitragen können. 2 Unter die Überschrift „Umwelt und Klima“ sind Beiträge geordnet, die sich gemeinsam mit Harald Fuhr oder in gegenseitiger Inspiration der Frage widmen, wie regionalen und globalen Umweltveränderungen begegnet oder entgegengewirkt werden kann. 3 Unter die dritte und letzte Überschrift „Praxis“ ist schließlich eine Reihe von Praxisbezügen summiert - Harald Fuhrs mehr oder weniger heimliches Steckenpferd in seiner langjährigen Arbeit als Wissenschaftler und Professor für Internationale Politik. Mit Beiträgen von Thomas Hickmann, Markus Lederer, Malcolm H. Dunn, Joseph P. Ganahl, Sabine Kuhlmann, Heribert Dieter, Werner Jann, Wolfgang Merkel, Kilian Lüders, Nina Reiners, Tanja Börzel, Thomas Risse, Guillermo Navarro, Alonso Villalobos, Victor Milla, Hartmut Elsenhans, Thurid Hustedt, Markus Seyfried, Andrea Iro, Urvaksh D. Patel, Kristine Kern, Detlef F. Sprinz, Shradha Shreejaya, Devi K.V. Prasad, Charlotte Streck, Sebastian Wienges, Hendrikje Reich, Sven Egbers, Ursula Stiegler, Thomas Gebhardt, Andreas Obser, Christoph Reichard, Dieter Wagner, Ibrahin Amhed Leon Tellez
... We apply insights from economic theory on quality uncertainty and adapt it to the context of solar PV auctions [46,47,50,[67][68][69]. As mentioned in section 3.1, compliance with international quality standards has been shown to overcome the buyer's insufficient information or lack of trust, for example in international trade [47,67,69] and foreign direct investment [48,68]. ...
... We apply insights from economic theory on quality uncertainty and adapt it to the context of solar PV auctions [46,47,50,[67][68][69]. As mentioned in section 3.1, compliance with international quality standards has been shown to overcome the buyer's insufficient information or lack of trust, for example in international trade [47,67,69] and foreign direct investment [48,68]. International quality standards create trust, as they signal use of state-of-the-art production processes. ...
... International quality standards create trust, as they signal use of state-of-the-art production processes. Signaling applies in principle to both domestic and international investors, but information asymmetry and lack of trust are especially relevant for foreign investors [46,47,68,69]. In the following, we outline how international quality standards introduced as technical requirements in public auctions could help remedy the lack of information and trust in solar PV performance. ...
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Solar technology diffuses across the globe as countries transition from fossil to renewable energy. Little solar-specific experience and capacity in newly adopting countries can result in technical failures and lower solar plant performance. This contributes to making the investment in solar plants in newcomer countries risky and may undermine political targets of solar energy deployment. One solution suggested by international organizations is for policymakers in adopting countries to include international quality standards as technical requirements in public auctions. Here, we develop a conceptual framework on how international quality standards could help build a solar sector. As a case study, we analyze the explanatory factors of technical requirements in 100 public auctions of utility-scale solar photovoltaic plants carried out in India between 2013 and 2019. Our findings suggest that more international quality standards are required in auctions in which the government rather than a private actor ultimately carries the commercial risk. On the other hand, local content requirements and attracting foreign investors do not correlate with technical requirements. We argue that using minimal quality standards is unlikely to promote local technological catch-up or attract long-term foreign investments but transfers the techno-commercial risk from the government to the private sector.
... In the case of Vietnam and China, Dang [22] and Long et al. [23] found a positive institutional effect of FDI inflows, which also lends support to the "lobbying effect". Some scholars go a step further and argue that the direction of FDI's institutional effect partly depends on the institutional environment of the home country [15,56]. The behavior of MNCs may be strongly constrained by the home country government. ...
... This regulatory pressure from the home country raises opportunity costs for the MNCs engaging in corrupt behavior in order to secure business [15]. Prakash and Potoski [56] demonstrate that the institutional effects of FDI are not associated with how much FDI host countries receive, but rather, where they receive it. They found that FDI improves the ISO 14001 adoption rate (an environmental management standard) of host countries only when the FDI comes from home countries with high levels of this environmental management standard. ...
... In consideration of the cumulative effect of ODI and the economic size of the host countries, we measure CDII using China's ODI stock as a percentage of the host country's GDP. This measurement is in line with Prakash and Potoski [56], Malesky [16], and Gossel [70]. Data regarding China's direct investment comes from the Statistical Bulletin of China's Outward Foreign Direct Investment (corresponding years), and it is compiled by the Ministry of Commerce in China. ...
Article
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This article investigates the effects of China’s outward direct investment (ODI) on the institutional quality of the Belt and Road (B&R) countries. Based on a panel data set of 63 B&R countries during the period 2003 to 2016, we find that China’s ODI improves the institutional quality of B&R countries not only in the short run but also in the long run. Further, although China’s ODI exerts no differential impacts on host country institutional dimensions of “control of corruption,” “government effectiveness,” and “political stability” in countries with different natural resource endowments, it improves their institutional dimensions of “regulatory quality” and “rule of law,” implying that China’s ODI may help the host B&R countries minimize the “resource curse”. As one of the most important strategies for China’s opening-up development in the current era, the B&R initiative serves as means to promote sustainable development of B&R countries. The article therefore contributes to existing scholarship on the institutional effects of China’s ODI and sheds light on the mechanisms that drive sustainable development.
... The first viewpoint is that technology spillovers in foreign trade have reduced pollution emissions. Grubb et al., (2002) [17] and Prakash et al., (2007) [18] demonstrated that import and export market prices and the quality of foreign commodities put competitive pressure on domestic companies of importing countries. The competitive effect led companies to upgrade their environmental protection technology to reduce the intensity of pollutant emissions. ...
... The first viewpoint is that technology spillovers in foreign trade have reduced pollution emissions. Grubb et al., (2002) [17] and Prakash et al., (2007) [18] demonstrated that import and export market prices and the quality of foreign commodities put competitive pressure on domestic companies of importing countries. The competitive effect led companies to upgrade their environmental protection technology to reduce the intensity of pollutant emissions. ...
... Table 6 presents the estimation results when technology innovation, as measured by the number of patents granted in each province, is considered as the mediating variable. Models (17) and (18) show that import trade technology spillovers help stimulate technological innovations in each province. Except for lnTECH in Model (22), the two technology spillover variables significantly affect the emission intensities of the two industrial air pollutants after controlling for the number of patents granted in each province. ...
Article
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China is in a strategic phase of an industrial green transformation. Industrial air pollution is a key environmental target for governance. Because import trade is a core channel through which advanced environmental protection technology is absorbed, the question of whether technology spillovers brought about by import trade can reduce industrial air pollution emissions is a topic worth exploring. This paper uses a generalized spatial two-stage least-square (GS2SLS) model to explore the impact of import trade technology spillovers on industrial air pollution emission intensities using panel data from 30 provinces and cities between 2000 and 2017. Economic scale, industrial structure, and technological innovation are used as intermediary variables to test whether they play mediating effects. The results show that: (1) capital and intermediate goods technology spillovers directly reduce industrial air pollution emission intensity and (2) import trade technology spillovers indirectly reduce emission intensities by expanding economic scale, optimizing industrial structure, and enhancing technological innovation through mediating variables. Furthermore, industrial structure optimization and technological innovation have the largest mediating effects on industrial SO2, while economic expansion has the most significant mediating effect on industrial smoke and dust. The mediating effects of technology spillovers from intermediate goods exceed those of capital technology spillovers. Finally, industrial air pollution emission intensity demonstrates both spatial agglomeration and time lag effects. Environmental regulations and energy structure are shown to increase industrial air pollution emissions, while urbanization and foreign direct investment reduce industrial air pollution. Based upon these research results, some pertinent policy implications are proposed for China.
... India holds a dominant position in the global textile exports, and textile manufacturers must meet the environmental requirements of domestic and international buyers. These results are also coherent with previous findings for various industrial sectors (Zhu et al. 2007;Jeswani et al. 2008;Ervin et al. 2013;Prakash and Potoski 2007;Handfield et al. 2005). Together these results indicate that market forces in form of competition and demand positively influences firm managers decisions to adopt sustainable practices. ...
... Also, the difference in economic and institutional pressures faced by firms in emerging economies as compared to developed nations could lead to this statistical trend. These findings are however consistent with similar studies on comparison of corporate response towards adopting environment management practices between developing and developed country (Jeswani et al. 2008;Prakash and Potoski 2007), where similar factors were reported to be insignificant from a developing country's perspective. ...
Article
Full-text available
Abstract Our study identifies the motivations and barriers to pursue sustainability for textile firms in India and the impact of these factors on firm’s adoption of sustainable business practices. Our study is based on primary survey of 113 managers from textile firm who are responsible for taking decisions towards formulation of business policies, and drivers are the reasons why companies decide to pursue sustainable practices. Regression analysis shows that regulatory, market and economic factors are more significant in pushing firms to adopt sustainable practices, whereas initial cost of compliance is the biggest challenge in implementing these practices. The results of the study are extremely important in assisting firm managers in enhancing their understanding of factors for a successful environmental strategy and influencing them to embrace sustainability. The study also contributes to our understanding of environmental issues in textile supply chain and how it could be made environmentally more sustainable. Finally, implications to extend research on role of internal actors in the organisation in shaping and implementing environmental strategies are presented.
... Vogel (1995) argued that the effect of trade on domestic regulatory systems depends not on how much a country trades, but with whom it trades. In terms of mechanism, he suggests that trade is a vehicle to diffuse environmental practices from importing to exporting countries: the higher the salience of a given importing market for an exporter, the more likely importers will be willing to adopt environmental practices supported in the importing market (Prakash and Potoski, 2007). If importing countries enjoy substantial leverage to influence the regulatory standards in the exporting countries, they can help both raise or lower these standards. ...
... After all, this is also a requirement of RC's Stewardship code. Thus, exporting firms are probably getting a nudge from their importing markets to establish RC (Prakash and Potoski, 2007). Because industry associations seek to safeguard the economic and political interests of their members, they are likely to establish RC in their country in response to such pressures from the overseas market. ...
Article
Environmental clubs have proliferated across sectors and issue areas. We examine the diffusion of the chemical industry’s Responsible Care® (RC) program. Much of the work on the diffusion of clubs has focused on the demand side: why firms join these clubs despite the costs of doing so. There is some work focusing on the supply side: why actors establish or create a new club. However, there is virtually no work examining why national-level industry associations decide to subscribe to an existing global environmental club in order to make it available to their members. Industry organizations in 17 lower and middle-income countries have joined RC, comprising 25 percent of RC members. We ask, in the context of developing countries, what motivates national associations to join RC? Drawing on an original dataset of RC global diffusion in 195 countries (1985–2017), we estimate a Cox proportional hazards model of the risk of joining RC. We find that RC adoption is more likely when a country exports chemicals to other countries that have joined RC (the California effect) and is unaffected by the total volume of its chemical trade. Thus, while exposure to global markets per se may not influence RC adoption, incentives change considerably when countries’ key importers signal their support for these environmental practices. This is because importing firms often realize that because they have joined Responsible Care, NGOs and stakeholders expect them to demand that their overseas suppliers adopt the same sort of environmental policies and work place safety practices. In addition, peer pressure and learning matter: RC adoption is more likely when countries in close physical vicinity (e.g., within 500 miles) have joined the club. Finally, domestic factors play a role as well: both the level of democracy and the size of the economy encourage national associations to join RC.
... In general, studies associate the adoption of these certifications with key economic indicators such as gross domestic product (GDP), GDP per capita, gross national income (GNI), foreign direct investment (FDI) stocks, exports, imports, among others (see studies of Franceschini, Galetto, and Cecconi 2006;Prakash and Potoski 2007;Masakure, Henson, and Cranfield 2009;Freitas and Iizuka 2012;Zeng and Eastin 2012;Berliner and Prakash 2013;Fikru 2014;Salgado et al. 2016;Fura and Wang 2017;. However, it is noteworthy that despite the growing interest in analyzing indicators that influence the adoption of both ISO 9001 and ISO 14001 certifications in various countries as well as continents, a lack of consensus continues to prevail in extant literature with regard to the analysis based on a larger set of indicators from different categories, which, in turn, could help yield more accurate and satisfactory results. ...
... A study by Prakash and Potoski (2007) observed from an empirical model that FDI stocks are only strongly correlated with higher adoption of ISO 14001 across host nations when the FDI commences from countries with heightened ISO 14001 adoption. The study covered 98 countries, among which 74 were developed countries. ...
Article
With the rapid expansion of international trade, companies are progressively adopting management system standards that ‘dazzle’ the market, such as those in ISO 9001 and ISO 14001 certifications. However, the reports for ISO 9001 and ISO 14001 only provide the number of valid certifications, without presenting information on the variables that may influence an increase or difference in the number of these certifications. In response to this gap, this article aims to identify the main variables of the World Development Indicators (WDI) that influence the number of valid ISO 9001 and ISO 14001 certifications. The Knowledge Discovery in Databases (KDD) approach was used to identify relevant indicators, with correlation analysis performed to validate the data. Our investigation shows influences that previous studies had not found: the number of certifications and scientific articles, passenger transport by railways and air, greenhouse gases, and methane and nitrous oxide emissions.
... Since ISO/IEC 27001 is heavily associated with the use of IT and with the ICT sector (ISO, 2018;Mirtsch et al., 2020), we also include the influence on ICT development. Previous studies on the diffusion of other MS standards have furthermore highlighted the importance of institutional factors (Delmas and Montiel, 2008;Orcos et al., 2018) and economic factors (Potoski and Prakash, 2004;Prakash and Potoski, 2007) including trade (Corbett and Kirsch, 2001) which we will include as control factors. ...
... Especially in countries with high power distance, 'champions', such as large manufacturers, could be used to encourage their suppliers to demonstrate their conformance with this InfoSec MS. In countries with low power distance and high institutional collectivism, organizations can be motivated to actively self-regulate, whereas ISO/IEC 27001 can serve as an anticipatory tool to prevent or mitigate the need for new domestic regulations (Prakash and Potoski, 2007). As a contribution to theory, our study aims to enrich MS standard research and contribute to the scarce literature on operational aspects of InfoSec management (Crossler et al., 2013), following the need "for theoretically grounded research that uses empirical research methods" (Willison and Siponen, 2007). ...
Conference Paper
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In the wake of digitalization, organizations are increasingly exposed to risks associated with security breaches and must take measures to preserve the confidentiality, integrity, and availability of information, and to ensure business continuity. The international standard ISO/IEC 27001 assists organizations in setting up, maintaining and continuously improving their information security management systems. However, despite high growth rates, its international diffusion rates are quite heterogeneous. This paper explores why the diffusion of the international management system standard ISO/IEC 27001 differs across countries. We classify the adoption of ISO/IEC 27001 as a ‘preventive organizational innovation’ and draw from diffusion studies of other management system standards and information security research to develop a set of hypotheses. These relate to the impact of cultural dimensions and national ICT development. We use a negative binomial regression model with panel data covering 57 countries over a 12-year period from 2006 to 2017 to test our hypotheses. We find that the cultural dimensions future orientation, power distance, and institutional collectivism as well as high ICT development are driving factors for the diffusion of ISO/IEC 27001. We derive policy recommendations and avenues for future research.
... The data on INGOs comes from the Yearbook of International Organization. 42 To examine whether a country's participation in TGIs is driven by international economic interactions, I follow existing research and construct a variable that captures the weighted trade flow of a country (Prakash and Potoski 2007;Perkins and Neumayer 2010). This variable is based on bilateral trade data from the COW Project (Barbieri et al. 2009) and my own data on state participation in TGIs. ...
... It measures how much a country is economically connected to all other countries in the international system, weighted by its trading partners' TGI involvement. Specifically, the variable is computed as follows: trade i = j T GI j exports ij exports i 2 , where T GI j is country j 's number of TGI participations, exports ij is country i's exports to country j , and exports i is country i's total exports (Prakash and Potoski 2007). I use the natural logarithm of trade. ...
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... Consistent with the predictions of neoinstitutionalism, the results support Hypothesis 1, showing that coercive pressure from export dependence has a positive and significant effect on the diffusion of B2B e-commerce (β = 0.73, p < 0.00), indicating that export dependence, as a coercive mechanism for social change and technology transfer, can contribute significantly to the diffusion of B2B e-commerce between countries. Export relations, considered a form of resource dependence, have long been identified as a mechanism for social change [50,80,81]. Local firms can coercively adopt B2B e-commerce in response to the demands, standards, and procedures of their counterparts in other countries. ...
... Local firms can coercively adopt B2B e-commerce in response to the demands, standards, and procedures of their counterparts in other countries. Our results are consistent with the findings of prior research in other domains that confirms coercion as one of the prominent drivers behind the spread of technology worldwide [50,80,81]. With regard to Hypothesis 2, the results show that mimetic pressures from competition have no effect on the diffusion of B2B e-commerce. ...
... The adoption of the SA8000 social standard is new and more nuanced tool to enhance the trade and competitive advantage of China's international trade. The perceived benefits of SA8000 certification include overcoming social issues, knowing the value of enterprise, setting up emergency realizations, short term foreign investment with the aim to manage this new issue, and additionally support their own management Prakash and Potoski [78]. For the benefit of economic development, the government should be aware of relevant laws and regulations, improve and impose them, and this holds true for labor laws. ...
Article
The purpose of this empirical study is to undertake a comparative analysis of developing vs. developed countries based on adoption of ISO 9001, ISO 14001 and SA8000 certifications and their impact on international trade. We utilize a combination of models including Deng’s Incidence Analysis (GIA), Absolute Degree GIA, Second Synthetic Degree GIA (SSDGIA) and Conservative (maximin) approach to inform decision making under uncertainty. Data was collected from the ISO and SAI official websites of the top fifteen certified countries for the period of 2002 to 2017. Additionally, export of goods and services data was gathered from the World Bank. The results reveal that the adoption of Quality, Environment and Social (QES) standards have a positive and significant effect on exports of goods and services in developing countries. While this is interesting, we also find that ISO 14001 certification contributes more to economic development than ISO 9001 and SA8000 in both developed and developing countries, with developing countries showed superior performance. This study is the first of its kind in evaluating the association of QES standards on international trade in developed and developing countries while using multiple grey relational analysis models. Finally, this article proposes recommendations for policymakers to improve international trade and sustainable development. [Citation: Ikram, M., Sroufe, R., Rehman, E., Shah, S. Z. A., & Mahmoudi, A. (2020). Do quality, environmental, and social (QES) certifications improve international trade? A comparative grey relation analysis of developing vs. developed countries. Physica A: Statistical Mechanics and its Applications, 545, 123486.]
... By threatening to leave, taking away the employment and tax revenue, foreign investors create pressures and forces for local leaders to make institutional reforms (Malesky 2008), where the property right protection is one of the most requirement (Ali et al. 2011). In the same idea with the theory of technological spillover effects, FDI inflows could transmit their own countries' regulation and institutions to host countries (Prakash and Potoski 2007). Moreover, the higher FDI inflow can make local authorities more autonomy to implement their current institutional innovation policies (Malesky 2008;Dang 2013), while it promotes competition between local governments to reduce corruption (Ades and Tella 1999) in line with lower tax and fee burden and better rule of law (Long et al. 2015). ...
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This paper empirically investigates the three-way linkages amongst foreign direct investment (FDI), shadow economy and institutional quality by applying the panel dynamic simultaneous-equation modelling approach for a sample of 19 developing Asian countries over the period of 2002–2015. The empirical results by two-step System GMM show that institutional quality attracts inward FDI and FDI in its turn improves institutional quality, institutional quality is not only the cause but also the consequence of the shadow economy, and FDI inflows help reduce shadow economies though the channel of institutional improvement and lower shadow economies – which increase institutional quality – encourage FDI inflows. The empirical insights suggest helpful policy implications to deal with these dynamics simultaneously.
... A similar observation has been made by scholars working from institutional theory perspective who aptly notes the role of globalisation and managerial values in diffusing global management practices and standards (e.g. Thauer, 2014;Prakash, & Potoski, 2007). Ananthram & Nankervis (2014) have discovered that the quest for a 'global mind-set' is pushing more Indian managers to try to become more like their North American Western counterparts, while Huang and Staples (2017) found that Chinese MNCs are keen to export their governance practices as they internationalise. ...
Chapter
The studies in corporate governance have explained different motives responsible for adoption of corporate governance. This chapter provides answers to why business should be morally responsible and practice CSR. The authors shed light on crucial areas of corporate responsibilities of business and various theoretical justification advanced in previous studies in CSR. They look at the relationship between CSR and corporate governance – their crucial points of divergence and convergence. They also look at ethics and responsibilities for unethical behaviours and ethical theories with their limitations. Finally, they evaluate CSR and ethics from African perspective – how CSR in Africa is framed from by sociocultural influences, like communalism, ethnic-religious beliefs, and charitable tradition (ubuntu philosophy).
... A similar observation has been made by scholars working from institutional theory perspective who aptly notes the role of globalisation and managerial values in diffusing global management practices and standards (e.g. Thauer, 2014;Prakash, & Potoski, 2007). Ananthram & Nankervis (2014) have discovered that the quest for a 'global mind-set' is pushing more Indian managers to try to become more like their North American Western counterparts, while Huang and Staples (2017) found that Chinese MNCs are keen to export their governance practices as they internationalise. ...
Chapter
The studies in corporate governance have explained different motives responsible for adoption of corporate governance. This chapter provides answers to why business should be morally responsible and practice CSR. The authors shed light on crucial areas of corporate responsibilities of business and various theoretical justification advanced in previous studies in CSR. They look at the relationship between CSR and corporate governance – their crucial points of divergence and convergence. They also look at ethics and responsibilities for unethical behaviours and ethical theories with their limitations. Finally, they evaluate CSR and ethics from African perspective – how CSR in Africa is framed from by sociocultural influences, like communalism, ethnic-religious beliefs, and charitable tradition (ubuntu philosophy).
... Obtaining other types of international certification is also helpful for adopting ISO 14000 standards (Christmann and Taylor, 2003). In addition, firms that intend to participate in the global value chain are more active in adopting ISO 14000 (Nishitani, 2010;Prakash and Potoski, 2007). Positive correlations between exporting and ISO 14000 or 14001 certification have been detected by some studies (Christmann and Taylor, 2001;Prakash and Potoski, 2006;Nishitani, 2009) but not others (Dasgupta et al., 2000;Boys and Grant, 2010). ...
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Porter Hypothesis has evoked almost three-decade debate on whether environmental regulation can stimulate firm innovation. However, one missing component in this long stream of literature is the absence of voluntary environmental regulation when defining environmental regulation policy in the first place. We address this gap by examining the impact of the voluntary environmental certification of ISO 14000 on firm innovation. Adopting firm-level survey data, our results show that ISO 14000 certification leads to more innovation input and output in sampled Chinese firms. Therefore, our study sheds light to the debate on Porter Hypothesis and contributes to green innovation literature.
... Diffusion of practices into host countries from origin countries can uplift the existing scenario in host countries. In this context, Prakash and Potoski (2007) focused on ISO 14001 and found that inward FDI stocks help to achieve higher levels of adoption of ISO 14001 in host countries only when FDI originates from home countries that have well established ISO 14001 system. Host countries ISO adoption levels are not associated with the amount of overall FDI received but from whom they received. ...
Book
This book examines the Indian mandate for Corporate Social Responsibility (CSR) and its implementations in various individual organizations. Although the mandate is applicable only to certain large and stable companies, many believe that India is poised to become the birthplace of social, economic and environmental transformation, given the immense size of the Indian population and its challenging socio-economic index. The book explores the various facets of CSR investigation and places special emphasis on the Schedule VII of the Indian Companies Act of 2013, which defines specific areas of intervention for these companies. In addition, it provides a wealth of first-hand case studies that exemplify the ongoing developments and the fundamental challenges and opportunities of mandated CSR.
... On environmental governance, some consider how country-level factors, including public sector regulatory quality as well as levels of participation among trade and investment partners, affect national participation rates in voluntary environmental schemes (e.g. Berliner and Prakash 2014;Prakash and Potoski 2006;Prakash and Potoski 2007). Other analyses account for firms' selection into voluntary programs, but they address firm selection to avoid bias in their assessment of program outcomes, rather than treating selection as of direct theoretical interest (e.g. ...
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Most research on private governance examines the design and negotiation of particular initiatives or their operation and effectiveness once established, with relatively little work on why firms join in the first place. We contribute to this literature by exploring firms’ willingness to participate in two recent, high-profile private initiatives established in the aftermath of the Rana Plaza disaster in the Bangladesh ready-made garment (RMG) sector: the Accord on Building and Fire Safety and the Alliance for Worker Safety in Bangladesh. Using novel shipment-level data from U.S. customs declarations, we generate a set of firms that were “eligible” to join these remediation initiatives. We are able to positively attribute only a minority of US RMG imports from Bangladesh to Accord and Alliance signatories. Firms with consumer-facing brands, publicly-traded firms, and those importing more RMG product from Bangladesh were more likely to sign up for the Accord and Alliance. Firms headquartered in the USA were much less likely to sign onto remediation plans, especially the Accord.
... One approach for corporate groups to meet their special need for internal consistency is the application of standards (e.g. Guler, Guillén, and Macpherson 2002;Gereffi, Humphrey, and Sturgeon 2005;Gibbon and Ponte 2005;Prakash and Potoski 2007;Grajek 2008, 2014;Kaplinsky 2010;Perez-Aleman 2011;Gereffi and Lee 2012). In particular, the development of company standards, which are generally not available to the public, provides a tool to transfer sensitive, company-specific information between firms of the same corporate group (Sturgeon, van Biesebroeck, and Gereffi 2008). ...
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The role of company standards as a strategic tool for the optimisation of internal processes and governance of inter-firm relationships has only recently received researchers’ attention. This paper adds to the very limited body of literature by providing empirical evidence of the motives to implement company standards in general and their importance in corporate groups in particular. Using data on German companies active in standardisation, the empirical analysis confirms that companies that are part of a corporate group utilise a higher number of company standards than single firms. By codifying and transferring company-specific information, internal standardisation enhances legal security, productivity, and quality. In particular for corporate groups, internal standards additionally play a crucial role in the realisation of technical interoperability, which facilitates the development and management of internal platforms. The data, therefore, provides empirical evidence that standardisation can be used as a tool to improve efficiency and communication, and thereby facilitate global governance of multinational firms.
... Scholars suggest that the cost savings generated from the relocation of firms to developing countries (pollution havens) are often outweighed by loss in reputation back in the country of origin. Firms importing from developing countries are likely to face growing pressure from their home countries to ensure environmental protection for the exporting countries (Prakash and Potoski, 2007). Thus, trade can be instrumental for boosting environmental standard of imported goods entering into the developed countries as exports from the developing countries. ...
Article
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The environmental effects of urbanization and globalization are still subject to debate among scholars. South Africa is the most globalized, most urbanized and the most carbon-intensive economy in Sub Saharan Africa (SSA) region. Taking this into cognizance, this study examines the effects of urbanization and globalization on CO2 emissions for South Africa using time series annual data for the period 1980–2017. Zivot and Andrews single and Bai and Perron multiple structural break unit root tests are employed to assess if all the series are stationary. This procedure follows ARDL cointegration test to check the presence of a long-run association among variables. Having been confirmed about such a cointegrating relation, ARDL short-run and long run coefficients indicate that urbanization induces CO2 emissions while only long-run significant emissions effect of globalization was noted. Toda-Yamamoto non-causality test reports a bi-directional causal link between urbanization and CO2 emissions. No causal link is observed between globalization and CO2 emissions. Variance decomposition results do not rule out these effects in future. Policy implications are discussed. Keywords: Economics, South Africa, Globalization, Urbanization, Energy poverty
... Thứ hai, các nhà đầu tư nước ngoài có thể cung cấp cho các nhà lãnh đạo địa phương những thông tin hữu ích về luật pháp và các quy định ở nước mình và các nước khác mà họ đang hoạt động (Prakash & Potoski, 2007). ...
Article
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Nghiên cứu phân tích mối quan hệ nhân quả hai chiều giữa đầu tư trực tiếp nước ngoài với chất lượng thể chế tại 19 nước châu Á trong giai đoạn 2002-2015 thông qua mô hình hệ phương trình đồng thời. Bằng phương pháp ước lượng 3SLS và SGMM, nghiên cứu đã chứng minh chất lượng thể chế là một tín hiệu tích cực trong thu hút FDI và ngược lại, FDI là một kênh quan trọng thúc đẩy chất lượng thể chế. Nghiên cứu tìm thấy các yếu tố then chốt ảnh hưởng đến chất lượng thể chế bao gồm: Dân chủ hóa, độ mở thương mại, giáo dục, và thu nhập quốc dân bình quân đầu người; đồng thời, nghiên cứu cũng chỉ ra các nhân tố quan trọng để thu hút FDI bao gồm: Đầu tư trong nước, quy mô thị trường, nguồn lao động, chất lượng lao động, độ mở thương mại, và nguồn tài nguyên thiên nhiên. This paper empirically investigates the bidirectional causual nexus between foreign direct investment (FDI) and institutional quality in 19 Asian countries over the period of 2002-2015 by an approach of simultaneous equation model. The results of 3SLS and SGMM estimators affirm a positive bidirectional nexus between FDI and institutional quality: institutional quality is a signal to attract FDI, and FDI, in its turn, is a channel to promote institutional quality. The study also finds key determinants of institutional quality such as democratization, education, trade openness, and gross national income per capita; and also important factors to attract FDI, including domestic investment, market size, laborforce, the quality of labor, trade openness, and natural resources. Từ khóa: Các nước châu Á; Chất lượng thể chế; FDI; Mối quan hệ nhân quả hai chiều; SGMM; 3SLS.
... FDI inflows can stimulate the improvement of institutional quality through potential channels as follows. First, foreign investors can transmit their own countries' regulations and institutions to host countries (Prakash and Potoski 2007) in the same way as technological spill-over effects do. Second, FDI businesses may threaten local leaders to leave with tax revenue and employment, forcing them for institutional reform (Malesky 2008). ...
Article
This study sheds light on the impacts of FDI inflows and underground economy on institutional quality, as well as the moderating effect of underground economy on FDI – institutional quality nexus in 43 developing countries worldwide during 2002-2009. By using FGLS and SGMM for estimation, we find that FDI inflows have a positive impact on institutional quality, while underground economy and the interaction term between FDI and underground economy have negative impacts on institutional quality. Our results indicate that FDI inflows initially help improve institutional quality, but the presence of underground economy reduces this effect until the underground economy reaches a threshold, then above this threshold, the total impact of FDI on institutional quality turns negative. The findings imply that to foster the role of FDI in ameliorating institutional quality, governments in developing countries must control the underground economy at certain levels below the threshold. Highlights • FDI inflows improve institutional quality in the host countries. • The underground economy reduces institutional quality. • The impact of FDI on institutional quality depends on the underground economy. • There is a threshold of the underground economy. Below this threshold, FDI inflows enhance institutional quality; but FDI inflows jeopardize institutional quality when the underground economy is above this threshold.
... Early empirical studies examine the role of different output and input market factors on per capita diffusion of ISO 14001 standard across countries (Bae et al., 2018;Corbett & Kirsch, 2001;Potoski & Prakash, 2013;Prakash & Potoski, 2007). Most of the studies found that export orientation of firms and particularly country to which firms primarily export (advanced economies) influences the ISO 14001 adoption decision. ...
Article
This study provides an understanding of motivational factors that lead to the adoption of an environmental management system (EMS) from the perspective of resource‐based view theory. Further, the role of EMS has been examined to reduce energy intensity by estimating the average treatment effect. Therefore, different logistic regression has been estimated to find out major motivational factors. Results from the logit model validate the role of firm's size, age, and ownership in motivating firms to adopt an EMS whereas regulatory pressure does not influence the firm's adoption of EMS. Furthermore, negative average treatment effect shows the effectiveness of certification in reducing energy intensity. The comparative analysis of sustainability report indicates that TATA Steel outperforms in terms of carbon emission intensity as compared with Steel Authority of Indian Limited, Jindal power and steel limited, JSW Steel, and average Indian firms. Nonetheless, top Indian steel companies are far behind the global best practices in terms of energy, water, emission, and effluent performance indicators.
... On this basis, corporations then pursue actions that will promote stakeholders' long term interests. Prakash & Potoski (2007) and Fikru (2014) agree that investors and creditors can exert pressure on corporations to adopt and follow international best practices. The implication of stakeholder theory for the current study is that, stakeholders of banks operating in a globalised setting such as local and foreign customers, local and foreign investors, auditors, local and foreign suppliers, local and foreign tax authorities, regulatory authorities, various shareholders, domestic and international creditors, local and global media, local community, international affiliates among others, will wield an influence on their reporting and accounting practices and standards. ...
Article
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Purpose This paper analyses the implications of globalization and the adoption of international standards (IFRS) for accounting information quality. Design/methodology/approach It employs a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for two related hypotheses. Findings First, banks financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high quality earnings among banks in developing economies during the period is attributed to the adoption of and interaction of IFRS with globalization as well as the strategy of banks to diversify within and across interest and non-interest income. Originality/value The authors investigate how globalization and the adoption IFRS affect accounting information quality.
... Thứ hai, các nhà đầu tư nước ngoài có thể cung cấp cho các nhà lãnh đạo địa phương những thông tin hữu ích về luật pháp và các quy định ở nước mình và các nước khác mà họ đang hoạt động (Prakash & Potoski, 2007). ...
Article
This paper empirically investigates the bidirectional causual nexus between foreign direct investment (FDI) and institutional quality in 19 Asian countries over the period of 2002-2015 by an approach of simultaneous equation model. The results of 3SLS and SGMM estimators affirm a positive bidirectional nexus between FDI and institutional quality: institutional quality is a signal to attract FDI, and FDI, in its turn, is a channel to promote institutional quality. The study also finds key determinants of institutional quality such as democratization, education, trade openness, and gross national income per capita; and also important factors to attract FDI, including domestic investment, market size, laborforce, the quality of labor, trade openness, and natural resources.
... This influence can take several forms with two key mechanisms leading to an improvement of the institutional quality of the host country. First, through their non-market strategies, MNEs (Hillman & Hitt, 1999) provide policymakers in host countries with information on rules and regulations in other countries in which they operate (Hewko, 2003;Prakash & Potoski, 2007). This transfer of knowledge and best practices will be effective only if host country governments are ready to adopt these rules and regulations in the domestic institutions. ...
Article
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Foreign direct investment (FDI) inflows into Africa have increased since the turn of the millennium, mainly due to FDI growth into African countries by multinational enterprises (MNEs) from developing economies. While African governments view this growth as a positive development for the continent, many governments in the West have raised concerns regarding the institutional impact of investments from developing economies. This paper examines the impact of FDI flows on institutional quality in African countries by distinguishing investments from developed versus developing economies. Previous empirical studies have found a significant relationship between FDI flows and institutional quality in African countries but regard the relationship as MNEs rewarding African countries for adopting institutional reforms. However, little attention has been paid to the reverse causality, i.e. that FDI can cause an institutional change in African countries. Using bilateral greenfield FDI flows between 56 countries during 2003−2015, we find no significant FDI effect from developed and developing economies on institutional quality in host countries. However, aggregate FDI flows from developed and developing economies have a significant positive effect on host country institutional quality but differ concerning the impact's timing. In contrast, we find no significant effect of FDI flows from China on host country institutional quality. Our results are robust to alternative measures of institutional quality.
... The inflow of foreign capital into firms means not only a strengthening of capital, but also control by foreign investors and the adoption of new management practices. The degree of adoption of international standards in individual countries is not related to how much total FDI host countries receive, but from whom they receive it (Prakash and Potoski 2007). Risk management in the Czech Republic is limited to companies that are required by their parent company abroad to follow formalized procedures, an outcome similar to that in neighboring Slovakia (Klučka and Grünbichler 2020). ...
Article
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The COVID-19 pandemic has had a devastating impact on many small and medium-sized businesses around the world. Enterprise risk management (ERM) is a conceptual framework that encompasses the systematic and comprehensive identification, analysis, and management of risks in an enterprise. In the post-communist countries of Central Europe, the level of ERM is still relatively low, especially in small and medium-sized enterprises (SMEs). This study fills a gap in the existing knowledge on ERM by shedding light on the influence of foreign capital on the level of ERM implementation in Czech SMEs. The aim of the study is to assess the influence of the share of foreign capital in Czech SMEs on the level of ERM implementation. A validated self-report of 296 non-financial SMEs in the Czech Republic was analyzed using latent class analysis (LCA) and multiple linear regression. The results of the study contribute to the literature by enriching the empirical analysis of ERM in emerging markets. The originality of the results lies in the identification of three distinct groups of firms according to the combination of implemented ERM elements—“no ERM”, “best practice ERM”, and “pretended ERM”—and the finding that the share of foreign capital, age, and firm size influence the level of ERM implementation. In particular, the positive influence of foreign capital in younger companies makes it possible to overcome the barrier of traditionalist thinking of old-school Czech managers influenced by the period of economic transition in post-communist countries. The paper builds on the existing evidence with new empirical conclusions and argues for a greater inflow of foreign direct investment into emerging markets.
... Broadly, studies show that regulatory arbitrage can be reduced through formal governmental regulations or voluntary, self-regulatory action by firms. Potoski and Prakash argued across a series of papers (see for example, Potoski & Prakash, 2013, Potoski & Prakash, 2004, Prakash & Potoski, 2007, Prakash & Potoski, 2006 that the diffusion of ISO environmental standards has challenged the pollution haven hypothesis. Private regulatory arrangements have attracted considerable academic and policymaking interest, as a wide range of company-sponsored regulatory arrangements have proliferated (Mayer & Gereffi, 2010). ...
Article
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Multinational enterprises operating global value chains are being increasingly pressured to source from suppliers that adopt green private standards. Likewise, public policymakers are also pressured to reduce national pollution levels to contribute to sustainable development initiatives. In this context, while there is extensive debate on how domestic, country-specific environmental regulations interact with private standards (adopted by firms) in reducing national pollution levels, less is known about the role of international trade policies, which have recently embraced an array of sustainability issues. Our paper seeks to extend our understanding of the extent to which ISO environmental certifications affect a country’s level of emissions of greenhouse gases and air pollutants, and whether the European Union’s environmental protection (EP) standards – as mediated through trade agreements – condition this response. Prior research provides mixed evidence on the impact of the adoption of ISO-14001 on pollution reduction. Based on prior literature and using institutional theory and environmental stewardship perspectives, we expect that membership of trade agreements with EP provisions would complement the effect of ISO-14001 uptakes in reducing national pollution levels. Our arguments and results emphasize the complexity between private and public regulations on pollution reduction.
... Broadly, studies show that regulatory arbitrage can be reduced through formal governmental regulations or voluntary, self-regulatory action by firms. Potoski and Prakash argued across a series of papers (see for example, Potoski & Prakash, 2013, Potoski & Prakash, 2004, Prakash & Potoski, 2007, Prakash & Potoski, 2006 that the diffusion of ISO environmental standards has challenged the pollution haven hypothesis. Private regulatory arrangements have attracted considerable academic and policymaking interest, as a wide range of company-sponsored regulatory arrangements have proliferated (Mayer & Gereffi, 2010). ...
Article
Full-text available
Multinational enterprises operating global value chains are being increasingly pressured to source from suppliers that adopt green private standards. Likewise, public policymakers are also pressured to reduce national pollution levels to contribute to sustainable development initiatives. In this context, while there is extensive debate on how domestic, country-specific environmental regulations interact with private standards (adopted by firms) in reducing national pollution levels, less is known about the role of international trade policies, which have recently embraced an array of sustainability issues. Our paper seeks to extend our understanding of the extent to which ISO environmental certifications affect a country's level of emissions of greenhouse gases and air pollutants, and whether the European Union's environmental protection (EP) standards-as mediated through trade agreements-condition this response. Prior research provides mixed evidence on the impact of the adoption of ISO-14001 on pollution reduction. Based on prior literature and using institutional theory and environmental stewardship perspectives, we expect that membership of trade agreements with EP provisions would complement the effect of ISO-14001 uptakes in reducing national pollution levels. Our arguments and results emphasize the complexity between private and public regulations on pollution reduction.
... 2014; To and Lee, 2014;Berliner and Prakash, 2013;Delmas and Montiel, 2008;Prakash and Potoski, 2007;Massoud et al., 2010); relation between ISO 14001 systems and other environmental management systems as well as systems for management in other areas like quality, safety (Testa et al., 2014;Granly and Welo, 2014;Neugebauer, 2012;Low Sui and Tan, 2005;Heras and Arana, 2010); enhancement of environmental management systems in line with ISO 14001 and its impact on their efficiency and effectiveness (Matuszak-Flejszman, 2010); evaluation of environmental audit quality (Prajogo et al., 2016;Heras-Saizabitoria et al., 2013); comparing the outcomes of environmental and financial operations of businesses which have implemented ISO 14001 EMSs and those which have not done it (Zobel, 2013;Naudé et al., 2011;Gomez and Rodriguez, 2011); application of environmental indicators (Comoglio and Botta, 2012); analysis of the human factor significance (commitment of employees, executives, the role of the person responsible for the system) for the efficiency of management in conformity with ISO 14001 (Rodríguezet al., 2011;Perez et al., 2009). The limited number of studies which concerned the analysis of environmental impact of system implementation were devoted to the assessment of the relation between the above and the attributes such as the size of the organisation, its ownership (private/public), sector (manufacturing/ service), stability/changeability of the applied technologies, amount of time for which the system has been in operation in a given organisation, possession of quality management system in conformity with ISO 9001, or finally, the extrinsic/intrinsic motivation for the system implementation (Matuszak-Flejszman, 2010;Prajogo et al., 2012;Boiral and Henri, 2012;Christmann and Taylor, 2006;Fura, 2013;Castka and Prajogo, 2013;Gavronski et al., 2013). ...
... Confronted with a different set of regulatory requirements in each country, they have a strong incentive to pursue regulatory uniformity across jurisdictions to maximize operational efficiency (Vogel 1997;Yaziji 2004). While this dynamic does not imply convergence in specific policy settings-multinationals are likely to reflect the diversity of policy positions of their home countries (Prakash and Potoski 2007)-it does indicate that multinationals should hasten the adoption and shape the spread of policy ideas among the jurisdictions in which they work. ...
Thesis
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In the face of daunting environmental challenges, leadership in the development of environmental policy may be more important now than ever. While some countries are willing to devote substantial time and resources to working on environmental issues, others lag behind. In this dissertation, I explore what it means to be a policy leader, the state and trajectory of environmental policy leadership globally, and which actors systematically catalyze (or obstruct) environmental policy leadership. I propose that policy leadership is an observable, persistent behavior in which a government is 1) innovative, adopting new policies quickly and 2) influential, inspiring other governments to adopt these same policies. I argue that transnational advocates, such as international NGOs and multinational corporations, are particularly well-positioned to strengthen (or weaken) policy leadership. Providing information, building capacity, and conducting pressure campaigns in multiple jurisdictions at the same time, transnational advocates are uniquely positioned to affect both the spread and uptake of new policies. Using novel data on the adoption of 3,000 environmental policies by 185 countries, I measure leadership in the development of environmental policy over time and assess the role of transnational advocates in policy development. I find that large international environmental NGOs spark environmental policy leadership, particularly in developing countries and on issues related to traditional environmental topics of flora, fauna, and pollution. In contrast, lobbying by multinational corporations in developed countries sharply reduces environmental policy leadership. These results demonstrate the substantial and varied impacts of transnational advocacy on environmental policy leadership. I make three notable contributions in this dissertation. First, I improve on prior conceptualizations of policy leadership, providing a definition that is straightforward to operationalize while speaking to more general understandings of leadership. Second, I develop a novel method for identifying policy adoptions from a compilation of laws and regulations; this generates a new database of environmental policy adoptions that overcomes the geographic and topical limitations of existing datasets. Finally, I contribute the first systematic, quantitative evidence of the impact of transnational advocates on policy change, demonstrating the importance of their activities for environmental policy development. With little time to waste, it is critical to understand why and when governments act as environmental policy leaders, and what can be done to facilitate environmental policy leadership. Through this research, it is clear that accounting for the activities of transnational advocates should be a key component of any attempt to catalyze proactive and meaningful environmental policy change.
... First, it attempts to analyze the dynamic relationship between urbanization, globalization, economic growth, energy consumption, and carbon dioxide emissions in the case of Mozambique. Second, previous studies measured globalization by trade openness in relation to an increase or decrease in environmental emissions (Antweiler, Copeland, and Scott Taylor 2001;Frankel and Romer 1999;Copeland and Scott Taylor 2003;Prakash and Potoski 2007;Le, Chang, and Park 2016), whereas this study uses the globalization index, which is constructed from three subindices (social, economic, and political globalization) from the KOF index to evaluate its impact on CO 2 emissions (Jorgenson and Givens 2014;Lim, Menaldo, and Prakash 2015;Lv and Xu 2018;Salahuddin et al. 2019). Third, the researcher used multivariate econometric techniques such as the Augmented Dickey-Fuller test (ADF) and Phillips-Perron (PP) unit root tests, the Johansen cointegration test, the autoregressive distributed lag (ARDL) bound test, and the Toda-Yamamoto causality test and then checked the impact countrywise. ...
Article
This study was designed to investigate the nexus between urbanization, globalization, and CO2 emissions in Mozambique using time series data for the period 1980–2013. A bound testing approach to cointegration and error correction models of an autoregressive distributed lag (ARDL) model was applied for long-run relationships, and the Toda–Yamamoto causality test was used for causal analysis. The ARDL coefficients indicated that GDP per capita, globalization, and urbanization induce CO2 emissions in the long run, whereas access to electricity reduces emissions. Moreover, access to electricity, GDP per capita, and urbanization enhance carbon emissions in the short run. A bidirectional causality exists between globalization and CO2 emissions. Thus, appropriate green development programs that promote renewable energy should be designed to enhance environmental quality in urban areas. Further, designing sustainable urban planning policies and maintaining a sustainable lifestyle are recommended.
... There persists a minority view today that the impact of FDI on carbon emissions is linked to numerous factors such as environmental regulations, governance technologies, economic development levels in countries, human-capital structure, and domestic enterprises' absorptive capacity. Furthermore, there are differences across regions, in the form of the "scale effect" [21,22]. Based on the time-series data of Shandong Province from 2000 to 2016, Wang and Chu studied the mechanism of FDI on energy consumption in Shandong Province according to three aspects: scale effect, structure effect, and technology effect. ...
Article
Full-text available
Reducing carbon emissions and realizing green, circular, and low-carbon development is essential for high-quality economic development. Following the construction of a superefficiency SBM model and combining the panel data of three major urban agglomerations in the Yangtze River Economic Belt from 2003 to 2017, carbon emission efficiency was measured and analyzed. A spatial Durbin model (SDM) was incorporated to analyze the urban agglomerations in the Yangtze River Economic Belt and the impact of urbanization quality and foreign direct investment (FDI) on carbon emission efficiency. Finally, the SDM model was used to decompose the spillover effect. Generally, carbon emission efficiency in the three major urban agglomerations in the Yangtze River Economic Belt is low, with regional differences. FDI only has a positive impact on the carbon emissions of the Yangtze River Delta and the middle reaches of the Yangtze River. Furthermore, urbanization and population density have led to high levels of carbon emission in the region; however, the industrial structure and energy intensity factors have inhibited the improvement of regional carbon emission efficiency. Improving the quality of urbanization and trade structure is important to achieve energy conservation and emission reductions, which are pillars of sustainable economic development.
... In consistency with what the "California effect" suggests, Potoski and Prakash (2005), Prakash and Potoski (2006, Saikawa (2013), and Zeng and Eastin (2007) all find that a country 5/50 voluntarily adopts higher regulatory standards in environmental protection when the country primarily exports to, or receives investments from, greener nations. These findings on the trade-embodied environmental enforcements, to some degree, nullify the prevalent pollution heaven hypothesis, which posits that the North-South trade causes the environmental degradation in developing countries. ...
Preprint
Governments have an irreplaceable role in supporting environmental innovation due to market failure. Nevertheless, this article develops the free riding argument that the trade-driven technology transfer incentivizes national governments to underspend on environmental innovation. The data on government environmental research and development (R&D) expenditures and bilateral trade volumes of environmental goods from 32 OECD countries, 1982–2017, are used to substantiate my argument. Spatial regression finds that nations spend less on environmental R&D as a response to the increasing spending from their trade partners in the preceding year. This research contributes to the broader literature by presenting a new mechanism underlying the trade-environment nexus and showing that the strengthening transnational interdependence does not necessarily drive norms and policies to diffuse internationally.
... Larraín B and Tavares (2004) also found that foreign direct investment significantly reduces corruption level. There are numerous positions through which foreign stockholders could considerably affect local economic action and governance (Luo, 2002;Prakash & Potoski, 2007). Due to the positive nexus between foreign investment and business environment, it is expected that the national private sector could also get benefit from local governance improvement and enhanced public facilities. ...
Article
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The study examines the nexus between FDI, institutional quality, and financial development in Pakistan. We believe that it is a novel research attempt as it covers both democratic and non- democratic regimes. We use linear ARDL methodology to predict the nature of the relationship as a baseline estimator and Granger causality as a robustness check for further validation of results. The study covers the period from 1990 to 2018. We find that both FDI and institutional quality positively affect financial development in Pakistan. We find bi-directional causality between financial development and institutional quality and a unidirectional casualty between FDI and institutional quality. Likewise, we also find a unidirectional causality between FDI and financial development, running from financial development to FDI. The study has some managerial implications for policymakers to strengthen the country’ macroeconomic environment and to encourage institutional reforms to boost up the confidence of local as well as foreign investors.
... Within the cross country diffusion literature, another stream examines ISO 14001 adoption behavior of developing country firms in the context of debates on globalization and global economic integration (e.g., Prakash and Potoski, 2006;Prakash and Potoski, 2007;Berliner and Prakash, 2013;Berliner and Prakash, 2014). While this literature is not necessarily focused on developing countries explicitly, their findings have significant implications for understanding ISO 14001 adoption behavior among developing country firms. ...
Conference Paper
Voluntary environmental initiatives (VEIs) by firms are often viewed as important for environmental management in developing countries such as India with weak regulatory institutions and poor enforcement of environmental laws. Past research shows that while VEIs may not be able to fully substitute for strong regulation, they could be useful complements to reduce environmental degradation in developing countries. In India, new government initiatives such as "Make in India" are geared towards significantly increasing the manufacturing output in the next few years. In this context, our paper studies the adoption of a widely employed VEI-the ISO 14001 standards certification-among the Indian manufacturing industries. Using the theoretical framework of Earnhart, Khanna, and Lyon (2014) on the drivers of corporate environmental strategies in emerging economies, we hypothesize that the likelihood of adoption of ISO 14001 standards among Indian manufacturing industries is a function of internal firm characteristics, input and output market pressures, and regulatory pressure. We test our hypotheses using a survey of 1000 (large, medium, and small) manufacturing firms across the country, conducted under the aegis of the World Bank in 2016. Results show that internal firm characteristics such as large size and firm innovation have a positive association with the likelihood of adopting ISO 14001 standards. Output market pressures, such as exporting to foreign markets, also positively impact the likelihood of obtaining ISO 14001 certification. In particular, exporting to China, which is ranked first in the number of ISO 14001 adoptions, has a statistically significant impact on probability of adoption. There is no evidence, however, that predominantly consumer-facing firms, another potential indicator of output market pressure, are more likely to adopt ISO 14001 standards. We also find state-fixed effects, potentially capturing the variation in both formal and informal regulatory pressure across states. Thus, consistent with other research in developing countries, we find that pressure to meet the environmental standards of countries to which firms in developing countries export their products acts as a strong incentive to adopt VEIs such as ISO 14001 standards. The lack of evidence that consumer-facing firms are no more likely to adopt ISO 14001 standards potentially indicate that firms in India do not yet find the green consumer markets large enough to adopt VEIs.
... The same authors employ a panel of 106 countries to investigate how trade linkages and export performance may encourage ISO 14001 adoption and conclude that countries whose export destinations demonstrate higher levels of ISO 14001 certifications tend to exhibit higher certification rates themselves (Prakash and Potoski 2006a, b) used. In a similar vein, they also highlight the critical role of foreign direct investment (FDI) in the ISO 14001 adoption rates of host countries when FDIs originate from corporations originating from countries with high levels of ISO 14001 adoption (Prakash and Potoski 2007). Indeed, multinational enterprises are in the unique position to act as agent of change in foreign settings and influence the dissemination of standardized management system standards through their bargaining power in supply chains of goods and services (Neumayer and Perkins 2005). ...
Article
Being one of the primary soft-voluntary environmental policy instruments, ISO 14001 has been studied from a number of diverse perspectives and disciplines. Nevertheless, it is only few assessments that have attempted to shed light on variations in the diffusion ISO 14001 certification among countries in terms of national factors and macroeconomic conditions that may stimulate relevant implementation patterns. We employ a 1999–2017 annual time-series that yields a panel dataset of 33 countries, out of which 27 are OECD countries, complemented by the BRIICS. Applying the appropriate static and dynamic econometric specifications, the EKC hypothesis is not rejected in all the cases in static and dynamic specifications. Our turning points are in all cases within the sample ranging from $20,812 to $52,023.
... This finding is consistent with the world society perspective which predicts that countries embedded and operating in highly interdependent international systems will be increasingly prompted to adopt and isomorphically acquiesce to legitimate models of international society (Drori et al., 2006;Guler et al., 2002;Meyer, 2010;Meyer et al., 1997). The result is also in line with empirical findings of prior research (Cao and Prakash, 2011;Prakash, 2007;Prakash and Potoski, 2006). Unexpectedly, the effect of CPII was nonsignificant (β = 0.008, p > 0.05), suggesting that CPII does not affect the diffusion of B2B EC in different countries. ...
Article
Using institutional theory, this study offers an integrated framework that describes the diffusion of business-to-business e-commerce within a country. The model specifies the role of national institutional frameworks, international institutional pressures, and market complexity in business-to-business e-commerce diffusion. We test this model using archival, cross-sectional data from 146 countries for the period from 2013 to 2016. The study also compares the roles of these factors in business-to-business e-commerce diffusion across developed and developing countries. The results suggest that national institutional frameworks, international institutional pressures, and market complexity contribute positively to business-to-business e-commerce diffusion and that the influence of these variables varies according to the degree of a country’s development. Theoretical, research, and managerial implications of the study are also discussed.
Chapter
This chapter suggests that MNEs’ voluntary environmental management efforts are increasingly recognized and research on MNEs’ environmental management strategies has grown over the years. Significant research has gone into the factors that affect the adoption of environmental management ‘standards’ (such as the ISO 14001, EMAS, and Responsible Care) by MNEs’ subsidiaries in a host country context. This chapter provides a review of extant literature on the determinants of MNEs’ environmental management standards adoption and sheds light on how MNEs’ subsidiaries can adopt such standards. A detailed analysis of theoretical explanations and empirical findings of existing literature is presented and summarized, identifying the institutional, market-based, non-market, and firm-level factors determining this behaviour. The chapter concludes with an argument that an MNE’s home-country institutional environment matters in the adoption of environmental management standard by its subsidiaries.
Book
The literature on the ISO standards is multidisciplinary and scattered around a broad collection of journals, making it near-impossible to get an overview of what we do and do not know about Management Systems Standards. This monograph fills that gap by providing an integrated perspective on the entire body of academic literature related to ISO 9000, ISO 14000, and related standards. The aim is to provide an overview of the academic empirical literature on ISO 9000, ISO 14000 and related management systems standards to improve the quality, relevance and coherence of that literature. The authors provide an overview of the design, governance and evolution of the ISO 9000 and 14000 standards. They then offer a very short chronological overview of the evolution of research into ISO management standards. The monograph contains a section "about this monograph," which provides details about the methodology we followed, and refers to the intended audience and novelty of the work.
Article
Decoupling economic growth from emissions is vital to achieve the environmental targets postulated by the Paris agreement and the Sustainable Development Goals. This paper analyzes a set of factors that have the potential to increase the rate of emissions decoupling in 35 OECD countries 1994–2016. It takes on an encompassing approach focusing on emissions decoupling from two pollutant types carbon dioxide (CO2) and nitrogen oxide (NOx) as well as emissions decoupling from both production-and consumption-based CO2 emissions. Drawing on existing research six key driving factors of emissions decoupling are derived and empirically tested. The paper contributes theoretically by widening the understanding of potential drivers of decoupling, as the six derived factors are not generally analyzed in conjunction. The paper is methodologically innovative in its use of event history models to analyze the significance of the explanatory factors in increasing the rate of emissions decoupling. The paper results in three main findings. One the paper provide empirical evidence of emissions decoupling across all analyzed countries and across all pollutant measures. Two, the paper shows that countries experience recurring instances of decoupling. Third, factors related to green technologies can increase the rate of decoupling both for different emission types and for emissions accounted for as production-and consumption-based.
Article
Why do governments compete for investment through tax incentives when there is strong evidence that such packages are inconsequential to the locational decisions of foreign firms? Previous scholarship has attributed pro-business policies such as investment incentives to factors including the structural power of business in an era of international capital mobility, fiscal competition generated through political decentralization or electoral pandering by political leaders. However, there is currently little understanding about how individuals, in their role as decision-makers within government agencies, form beliefs over how to best attract investment. Building on insights from the bureaucratic politics and behavioral economics literatures, we anticipate investment promotion professionals are more likely to view investment incentives as effective attraction tools when they have limited previous experience in the private sector, when they work for investment promotion agencies that are more integrated into the national bureaucracy, and when employee performance is evaluated based on deals closed. We test these expectations with a conjoint survey experiment of investment promotion professionals designed to uncover respondents’ beliefs over the relative importance of different components of the investment environment to firms’ locational decisions, and find substantial support for our expectations.
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Purpose The purpose of this paper is to explore how national cultures contribute to explain the uneven diffusion of ISO 14001 across countries. The paper focuses on two of the cultural dimensions developed by the global leadership and organizational behavior effectiveness (GLOBE) project, namely, performance orientation and institutional collectivism. Design/methodology/approach A database containing information about the diffusion of ISO 14001 in 52 countries during the period 1999–2016 was built to carry out this research. The countries considered in this study represent about 90 percent of worldwide ISO 14001 certifications. The information was gathered from publicly available data sources: the ISO Survey, published every year by the International Organization for Standardization, the world development indicators of the World Bank, the cultural dimensions of the GLOBE project and the Index of Economic Freedom provided by The Heritage Foundation. Findings This research finds that both performance orientation and institutional collectivism influence the diffusion of ISO 14001. Whereas performance orientation slows down the diffusion of ISO 14001, institutional collectivism speeds it up. Additionally, this research shows that the slowing effect of performance orientation decreases in strength over time, while the accelerating effect of institutional collectivism becomes stronger. Originality/value The study adds to the understanding of the influence of national culture on the diffusion of environmental management standards, with an emphasis on ISO 14001. A key contribution of this research is that it explores how the influence of cultural dimensions change over time as a result of the development and maturation of ISO 14001.
Article
This article demonstrates the explanatory power of an expanded policy stream, as part of Kingdon’s Multiple Streams Framework. Product substitutes, corporate social responsibility, the global economy, and the market maverick rationalize the incentives under which regulators, consumers, businesses, and environmental NGOs interact to explain the formation of two landmark voluntary programs on mercury and arsenic use, respectively. Arsenic and mercury are ranked first and third, respectively, on the US Environmental Protection Agency’s priority list of hazardous substances. In both cases, the existence of a product substitute that performed on par with the original product but generated less negative environmental impact motivated the private sector to go beyond compliance in their environmental management. Notwithstanding, the push and pull of variables in the problem, politics, and policy streams, and the interplay of diverse actors led to the emergence of diverse forms of voluntary programs. In the mercury case, an industry association steered the technocratic process of the chlor-alkali industry’s voluntary stewardship program, which led to marginal reductions in toxic chemical use, as part of the global phase-out of mercury already under way. By contrast, in the arsenic case, an environmental activist campaign successfully compelled the pressure-treated wood industry to concede to a voluntary cancelation of chromated copper arsenate, an arsenic compound, in residential uses. Subsequently, arsenic use fell to levels not seen since the 1920s. In both cases, strong coalition building—the former by businesses and the latter by environmental NGOs—combined with a fragmented or nonexistent opposing side shaped the final form of each voluntary program.
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When, how, and why do regional organizatiosns provide democracy, human rights, and rule of law institutions? The chapter introduces the reader to the repertoire of regional institutions to promote and protect fundamental governance standards in member states of regional organizations. It argues that demands and diffusion explain the adoption and design of regional institutions. Demands and diffusion occur at the same time, but their combinations play out differently across the type of adopter (pioneers, early followers, late adopters) and the instance of designing institutions (adoption, first institutional design, subsequent institutional designs). Because of the interplay of demands and diffusion, demands can be considered both enabling factors for and constraining factors of diffusion: demand-following pioneers set the path for diffusion, but demands of affected early followers and late adopters constrain diffusion processes.
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This paper aims to update and report the diffusion and forecasting models of Portuguese integrated management systems (IMSs) encompassing the ISO 9001, ISO 14001 and OHSAS 18001 standards (QES). A research method similar to that described by a previous relevant research on diffusion of QES in Portugal was adopted. Data concerning the evolution of the amount of multiple MSs in Portugal (ranging from 1999 to 2016) was retrieved from a periodical Portuguese publication (Barómetro da Certificação). The evolutionary behavior of the number of MSs over the years was studied adopting both the Gompertz and the simple logistic models. The results obtained by fitting the data to these models were dissected enabling a forecast for the forthcoming years. In opposition to the results of the original study (based on a higher percentage of extrapolated data) the data seem to be properly fitted by the simple logistic model. Similarly to the conclusions of the original study the diffusion throughout the years of the number of MSs presents an S-shaped behavior and the Gompertz model predicts a higher amount of IMSs at the saturation level (which is in line with the original conclusions).
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Since recent past, a good number of organizations have voluntarily started accepting green practices to make contributions to the environmental well-being by reducing wastes, developing green products, constructing their buildings in the most efficient greener way, recycling their wastes into marketable products and many other ways to make themselves green. Consumers have started demanding for green products and companies are more than happy to satisfy their demand by producing environmentally friendly products. A quest to reduce cost had led to environmentally friendly innovation that has led to a “win-win situation” for all the stakeholders. By going green, companies are attracting more investors to fund them, which would have remained stagnant otherwise without any funds for expansion. In this article, we have examined the main drivers of Corporate Environmentalism (CE) on a global level such as market forces, government and civil regulations. The article discusses the relation between Corporate Environmentalism with stakeholder satisfaction and employee retention and found positive relations among them. Green firms also pressurize their suppliers and other stakeholders to engage in acts of corporate environmentalism to avoid the criticism of green wash. Corporate eco-efficiency brings the benefits of both economic prosperity and environmental protection and states that “A clean environment is actually good for business, for it connotes happy and healthy workers, profits for companies, developing conservation technologies, selling green product and efficiency in material usage”. The article also explains the environmentalism scenario in Indian subcontinent.
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We explore the role of ISO 14001 certification in stimulating increased exports for certified firms. The rationale for the study is that certification conveys an important market signal that the certified firm's production process adheres to internationally accepted standards of environmental quality. That is, the perceived credibility of ISO 14001 certification lowers informational barriers about the environmental attributes of the certified firm's products, especially in foreign markets, boosting exports. We put this proposition to an empirical test using the gravity trade model and a panel of South Korean manufacturing industries exporting to 176 countries over the 1988–2015 period. Our results show that ISO 14001 certification generates a robust positive push effect for South Korean manufacturing exports. We further find that this effect varies based on the level of economic development of the destination market, with a more pronounced impact of certification on exports to high‐income countries than to middle and lower income countries.
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The past three decades have witnessed rapid economic development, particularly in countries that have pursued relatively open economic policies. Rising environmental awareness in the 1960s also led to a rapid tightening of pollution regulation in the industrial economies. According to the "pollution havens" hypothesis, the result should have been more rapid growth of dirty industries in unregulated economies that were open to international trade. Using data for the period 1960 to 1995, the authors find that the displacement of pollution to developing countries has not been a major phenomenon for several reasons. Tendencies toward formation of pollution havens have been self-limiting because economic growth has generated countervailing effects through increases in regulation, technical expertise, and investment in cleaner production. In practice, the authors argue that pollution havens have apparently been as transient as low-wage havens.
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Since the collapse of communism the states of postcommunist Europe and Asia have defined for themselves, and have had defined for them, two primary tasks: the construction of viable market economies and the establishment of working institutions of representative democracy. The variation in political and economic outcomes in the postcommunist space makes it, without question, the most diverse "region" in the world. What explains the variation? All of the big winners of postcommunism share the trait of being geographically close to the former border of the noncommunist world. Even controlling for cultural differences, historical legacies, and paths of extrication, the spatial effect remains consistent and strong across the universe of postcommunist cases. This suggests the spatially dependent nature of the diffusion of norms, resources, and institutions that are necessary to the construction of political democracies and market economies in the postcommunist era. The authors develop and adduce evidence for the spatial dependence hypothesis, test it against rival hypotheses, and illustrate the relationships at work through three theoretically important case studies.
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Multinational corporations (MNCs) have provoked considerable debate about the issues of "efficiency" and "social justice." The simultaneous surge in economic growth and inequality has led to serious implications for economic rights in developing countries. Using a rights-based perspective, we argue that in the human rights area the responsible party is generally the state. In the context of neoliberal globalization, however, the wrongdoers are often corporations. Reliance on state duties alone may not be sufficient to broadly protect human rights. Certain corporate behaviors are detrimental to internationally recognized norms of human rights. Although private actions, media exposure, and lawsuits based on civil law appear to be the only practical way to put the pressure on MNCs, it is important to examine the possibility of an outside governing body to hold in check unfettered global capitalism and to bring accountability to MNCs' policies that are socially detrimental.
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Standards have become one of the most important nontariff barriers to trade, especially national product standards that specify design or performance characteristics of manufactured goods. Divergent national standards often inhibit trade, whereas regional and international standards increasingly serve as instruments of trade liberalization. Consequently, the setting of international standards—seemingly technical and apolitical—is rapidly becoming an issue of economic and political salience. But who sets international standards? Who wins, who loses? This article offers a fresh analytical approach to the study of international standards, which the authors call the institutional complementarities approach. It builds on insights from realism and the “Battle of the Sexes” coordination game but emphasizes complementarities of historically conditioned standardization systems at the national level with the institutional structure of standardization at the international level. It posits that, after controlling for other factors that influence involvement in international standardization, differences in institutional complementarities play a critical though largely accidental role in placing firms from different countries or regions in a first- or second-mover position when standardization becomes global. The authors illustrate the insightfulness of this approach through statistical analyses of the first scientific set of data on standards use and standardization, collected by the authors through an international online survey.
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We analyze productivity spillovers from MNC subsidiaries to domestic Romanian companies, both within (horizontal spillovers) and across industries (vertical spillovers). We separate labor market spillovers from other horizontal spillovers and define the supply-backward linkage spillover that runs from foreign investors over domestic suppliers to local users of domestic inputs. In our panel of Romanian firms, labor market effects differ from other horizontal effects, vertical spillovers dominate horizontal spillovers and the newly defined supply-backward spillover is economically and statistically significant. The spillovers studied raise total factor productivity between 20% and 50% in the period 1998-2001, depending on the firm’s initial level of technology.
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Contents BOLI JOHN THOMAS GEORGE M. Part One: 1. BOLI JOHN THOMAS GEORGE M. 2. BOLI JOHN LOYA THOMAS A. LOFTIN TERESA Part Two: 3. FRANK DAVID JOHN HIRONAKA ANN MEYER JOHN W. SCHOFER EVAN TUMA NANCY BRANDON 4. BERKOVITCH NITZA 5. KIM YOUNG S. 6. FINNEMORE MARTHA Part Three: 7. LOYA THOMAS A. BOLI JOHN 8. BARRETT DEBORAH FRANK DAVID JOHN 9. CHABBOTT COLETTE 10. SCHOFER EVAN BOLI JOHN
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Voluntary programs have become widespread tools for governments and nongovernmental actors looking to improve industry's environmental and regulatory performance. Voluntary programs can be conceptualized as club goods that provide nonrival but potentially excludable benefits to members. For firms, the value of joining a green club over taking the same actions unilaterally is to appropriate the club's positive brand reputation. Our analysis of about 3,700 U.S. facilities indicates that joining ISO 14001, an important nongovernmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 is effective because its broad positive standing with external audiences provides a reputational benefit that helps induce facilities to take costly progressive environmental action they would not take unilaterally.
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The present world order involves a more ‘liberalized’ and commodified set of historical structures, driven by the restructuring of capital and a political shift to the right. This process involves the spatial expansion and social deepening of economic liberal definitions of social purpose and possessively individualist patterns of action and politics.Current transformations can be related to Braudel’s concept of the ‘longue duree’, in so far as the structure and language of social relations is now more conditioned by the long-term commodity logic of capital. Capitalist norms and practices pervade the gestes repetes of everyday life in a more systematic way than in the era of welfare-nationalism and state capitalism (from the 1930s to the 1960s), so that it may be apposite to speak of the emergence of what I call a ‘market civilization’.
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We examine the reduced-form relationship between per capita income and various environmental indicators. Our study covers four types of indicators: urban air pollution, the state of the oxygen regime in river basins, fecal contamination of river basins, and contamination of river basins by heavy metals. We find no evidence that environmental quality deteriorates steadily with economic growth. Rather, for most indicators, economic growth brings an initial phase of deterioration followed by a subsequent phase of improvement. The turning points for the different pollutants vary, but in most cases they come before a country reaches a per capita income of $8000.
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Institution theory and the resource-based theory of the firm represent two explanations of how organizations adapt to institutional change. These two theories are compared, contrasted, and applied to the context of environmental management. Arguments based on the theories are used to generate hypotheses about the diffusion and efficacy of the ISO 14001 system, a set of voluntary environmental standards. Empirical tests of the factors lying behind adoption of the ISO 14001 standards and whether or not the standards lead to toxic emissions reductions are conducted on a set of 316 electronics facilities located in the United States. Results support the idea that the standards allow facilities to "catch-up" to best practices if they are an especially high producer of toxic emissions. The paper ties the analysis back to current strategic management theories about organizations and institutional change, and then concludes by assessing the value of ISO 14001 versus traditional government regulation from the point of view of professionals and policy-makers.
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Multinational corporations are using cheap Third World labor to avoid the high labor standards of developed nations. The time is ripe for a global New Deal that protects the rights of all workers.
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With the publication of his best-selling books "Competitive Strategy (1980) and "Competitive Advantage (1985), Michael E. Porter of the Harvard Business School established himself as the world's leading authority on competitive advantage. Now, at a time when economic performance rather than military might will be the index of national strength, Porter builds on the seminal ideas of his earlier works to explore what makes a nation's firms and industries competitive in global markets and propels a whole nation's economy. In so doing, he presents a brilliant new paradigm which, in addition to its practical applications, may well supplant the 200-year-old concept of "comparative advantage" in economic analysis of international competitiveness. To write this important new work, Porter and his associates conducted in-country research in ten leading nations, closely studying the patterns of industry success as well as the company strategies and national policies that achieved it. The nations are Britain, Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden, Switzerland, and the United States. The three leading industrial powers are included, as well as other nations intentionally varied in size, government policy toward industry, social philosophy, and geography. Porter's research identifies the fundamental determinants of national competitive advantage in an industry, and how they work together as a system. He explains the important phenomenon of "clustering," in which related groups of successful firms and industries emerge in one nation to gain leading positions in the world market. Among the over 100 industries examined are the German chemical and printing industries, Swisstextile equipment and pharmaceuticals, Swedish mining equipment and truck manufacturing, Italian fabric and home appliances, and American computer software and movies. Building on his theory of national advantage in industries and clusters, Porter identifies the stages of competitive development through which entire national economies advance and decline. Porter's finding are rich in implications for both firms and governments. He describes how a company can tap and extend its nation's advantages in international competition. He provides a blueprint for government policy to enhance national competitive advantage and also outlines the agendas in the years ahead for the nations studied. This is a work which will become the standard for all further discussions of global competition and the sources of the new wealth of nations.
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We use panel data on ISO 9000 quality certification in 85 countries between 1993 and 1998 to better understand the cross-national diffusion of an organizational practice. Following neoinstitutional theory, we focus on the coercive, normative, and mimetic effects that result from the exposure of firms in a given country to a powerful source of critical resources, a common pool of relevant technical knowledge, and the experiences of firms located in other countries. We use social network theory to develop a systematic conceptual understanding of how firms located in different countries influence each other's rates of adoption as a result of cohesive and equivalent network relationships. Regression results provide support for our predictions that states and foreign multinationals are the key actors responsible for coercive isomorphism, cohesive trade relationships between countries generate coercive and normative effects, and role-equivalent trade relationships result in learning-based and competitive imitation.
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Contradictions associated with the growth in the power of capital suggest that the prevailing discourse and forces of globalising neoliberalism may have failed to gain more than temporary dominance or supremacy. A period of global recomposition of social forces may be emerging to reconfigure world order. A central task of global political economy is to theorise possibilities for a democratic transformation of world order, in the context of consciousness, culture, and material life, so as to transcend the oxymoron of neoliberal 'market civilisation'.
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Abstract The past few years have witnessed an increasing global interest in ISO 9000 standards. Thousands of companies have already been certified. However, doubts have been raised about the effectiveness of ISO 9000 standards for infusing quality within organizations. In this paper, we empirically explore, in the international context, the relationship between ISO 9000 and the level of quality management practices and quality results. Our findings indicate that ISO 9000 registered companies exhibit higher levels of quality leadership, information and analysis, strategic quality planning, human resource development, quality assurance, supplier relationships, customer orientation and quality results.
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Political scientists are often called upon to estimate models in which the standard assumption that the data are conditionally independent can be called into question. I review the method of generalized estimating equations (GEE) for dealing with such correlated data. The GEE approach offers a number of advantages to researchers interested in modeling correlated data, including applicability to data in which the outcome variable takes on a wide range of forms. In addition, GEE models allow for substantial flexibility in specifying the correlation structure within cases and offer the potential for valuable substantive insights into the nature of that correlation. Moreover, GEE models are estimable with many currently available software packages, and the interpretation of model estimates is identical to that for commonly used models for uncorrelated data (e.g., logit and probit). I discuss practical issues relating to the use of GEE models and illustrate their usefulness for analyzing correlated data through three applications in political science.
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Obra que reconstruye el origen y evolución de las actuales redes transnacionales que, con la utilización de las nuevas tecnologías informativas como recurso organizador y aglutinador, han logrado constituirse en movimientos más o menos presionadores en la defensa de los derechos humanos, de la protección ambiental y de una mayor equidad de género, entre otros.
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Increasing attention to environmental management has raised many new dilemmas for firms. How can managers deal with environmental issues in a competitive situation that is international and heterogeneous? What are the strategic and financial implications of environmental management? How can they cope with regulation, considering the choices which range from compliance to voluntary initiatives? And how do other firms organise their environmental management and communicate with stakeholders? This book examines these different topics, without dogma or prescription. It demonstrates the complexity of an area in which there are often no right or easy answers. The Economics of Environmental Management: 7 shows the links between the main functional areas of a business and environmental management; 7 examines regulation and self-regulation in different countries and worldwide; 7 pays specific attention to multinational enterprises; 7 gives an international state of the art on environmental management systems and standards (especially ISO 14001 and EMAS); on environmental reporting and verification; and on environmental management accounting; 7 contains international case examples and a wealth of annotated references to paper and electronic sources.
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This article examines the proposition that MNCs from a particular country are likely to exhibit profile similarities that are distinct from those of MNCs emanating from another country due to differences in home country factors. We call this “country of origin effect” (COE). A generalized framework is presented briefly explaining the nature of relationships among various COE elements that influence MNC strategy. A number of research propositions are offered that postulate the presumed effect of COE elements on MNC strategy and competitive behavior. Finally, suggestions are made as to the implications of this avenue of enquiry for further research as well as guide for management action.
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Globalization critics argue that international trade spurs a race to the bottom among national environmental standards. ISO 14001 is the most widely adopted voluntary environmental regulation which encourages firms to take environmental action beyond what domestic government regulations require. Drawing on a panel study of 108 countries over seven years, we investigate conditions under which trade linkages can encourage ISO 14001 adoption, thereby countering environmental races to the bottom. We find that trade linkages encourage ISO 14001 adoption if countries' major export markets have adopted this voluntary regulation.
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To test the claims of U.S. industries that environmental regulations would have adverse effects on profits and damage competitive market positions, an analysis was performed on foreign investments by U.S. companies involved in the highly polluting chemical and mineral processing industries. Widespread relocation to foreign countries was not detected. In a few specialized areas of the chemical industry involving particularly hazardous processes there has been some movement to countries which have less stringent pollution regulations. However, more awareness of environmental hazards has produced stricter control of environmental pollution in those same countries. The dramatic political changes in Eastern Europe may result in a large increase in U.S. industrial investment in the Warsaw Pact countries. There is a temptation to take a short view and conform to the lax environmental regulations of these countries which have produced grave industrial pollution problems. Investment should be directed towards pollution-free production not only in the Eastern European countries but also in the U.S.
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In the next ten years, who will win and who will lose from globalization? In thinking about this question, I avoid speculating on the broad impact of globalization on economic outcomes. Instead, I limit my treatment to the impact of multinational corporations (MNCs) on developed and developing countries, especially how competition to attract firms affects domestic politics and national economies. © 2005, American Political Science Association. All rights reserved.
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Studies of policy convergence among advanced industrial states are often based on an overly deterministic logic, a static conception of convergence and an unclear specification of the aspects of policy that are supposed to be converging. This article reviews a body of recent comparative policy literature to identify a fourfold framework of processes through which convergence might arise: emulation, where state officials copy action taken elsewhere; elite networking, where convergence results from transnational policy communities; harmonization through international regimes; and penetration by external actors and interests. In drawing some conceptual, methodological and theoretical lessons about how to study this phenomenon in the future, the article concludes that policy convergence should not denote an absence of state autonomy. Rather, an application of state-centred theory suggests that, with the exception of penetration, the other processes may occur through the autonomous preferences of policy makers to fashion convergent policies.