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Growing Exports by Signaling Product Quality: Trade Competition and the Cross-National Diffusion of ISO 9000 Quality Standards
Abstract
Trade policy is an important topic in global public policy. It is recognized that trade is hampered when buyers have incomplete information about the offered products, a problem accentuated in the international markets by the physical and cultural distances between buyers and sellers. Buyers look for proxies to assess product quality, and exporters that can provide assurance about quality gain a competitive advantage. Our paper focuses on voluntary or private regulatory programs that have emerged as important instruments to correct policy failures. We examine how trade competition motivates firms to signal quality by joining ISO 9000, the most widely adopted voluntary quality certification program in the world. Methodologically, our study is novel because we observe trade competition at the bilateral and the sectoral levels. Structural equivalence, the measure of competition we introduce in this paper, captures competitive threats posed by actors that export similar products to the same overseas markets. We study ISO 9000 adoption levels from 1993 to 2002 for 134 countries, and separately for non-OECD countries and non-EU countries. Across a variety of specifications, we find that trade competition drives ISO adoption: The uptake of ISO 9000 is encouraged by ISO 9000 adoption by firms located in countries that are “structurally equivalent” trade competitors. Given that information problems about product quality are likely to be more salient for developing country exporters, we find that trade competition offers a stronger motivation for ISO 9000 adoption in non-OECD countries in relation to developed countries. © 2010 by the Association for Public Policy Analysis and Management.
... As an international standard, ISO 9001 is the most widely used standardization facility in the world with mutually recognized in the international market. There is consensus in previous studies that ISO 9001 often used as a credible tool to signal their efforts in quality upgrading practices (Cao and Prakash, 2011;Estampe et al., 2013). ...
... According to Chinese law and regulations 5 , the label of ISO 9001 cannot be allowed to be printed directly on the product packaging to avoid misunderstanding with other quality certifications printed on product which can be directly perceived by consumers. Previous studies have pointed out that ISO 9001 is a quality-process certification, not a product certification (Sprow, 1992), but it often regarded as an important milestone of high-quality product production (Prasad and Naidu, 1994;Cao and Prakash, 2011). ...
... ISO 9001 sets out the criteria for a quality management system which helps organizations to improve the quality of their products and services and consistently meet their customers' expectations. There is consensus in previous studies that the ISO 9001 adoption is valuable because it constitutes a credible signal about firms' internal quality assurance practices (Cao and Prakash, 2011). Previous studies have recognized that ISO 9001 accreditation is a reliable tool that contains recognized higher quality production. ...
... There are various arguments on the role of competition in the adoption of international standard certificates. According to Cao and Prakash (2011), when competition is fierce, the motivation to adopt international standard certification as a signaling mechanism is even greater. These incentives for exporters in developing countries may be higher due to poor reputation and large differences in the quality of exported products (Cao & Prakash, 2011;Halkos, Nomikos, & Skouloudis, 2021;Potoski & Prakash, 2009). ...
... According to Cao and Prakash (2011), when competition is fierce, the motivation to adopt international standard certification as a signaling mechanism is even greater. These incentives for exporters in developing countries may be higher due to poor reputation and large differences in the quality of exported products (Cao & Prakash, 2011;Halkos, Nomikos, & Skouloudis, 2021;Potoski & Prakash, 2009). Prior studies also show that global competition can accelerate the adoption of ISO 9000 (Mangiarotti & Riillo, 2013;Potoski & Prakash, 2009). ...
... Exports is constructed as a dummy variable, equal to 1 if the firms performed exporting activities, and 0 otherwise (Fikru, 2016;Guler et al., 2002;Pekovic, 2010). Informal competition denotes the degree of informal competition perceived by the firm (Cao & Prakash, 2011;Fikru, 2014a). The information for this variable is from the question "To what degree are practices of competitors in the informal sector an obstacle to the current operations of this establishment". ...
This paper examines whether R&D, exports, and competition affect the adoption of international standard certification in ASEAN. Although prior studies recognized the importance of R&D, exports, and competition in determining a firm’s decision to adopt international standards, they often focused on a single determinant of this activity. Hence, this study tries to incorporate three important internal and external factors in a comprehensive study. The current study investigates these questions by analyzing the data from a valid sample of appropriately 4,000 firms in the manufacturing industries in eight countries in ASEAN in 2015-2016. The study utilizes a multilevel mixed-effects logit model for estimation to take into account the hierarchical nature of our data set. The results show that firms with R&D activities tend to adopt more international standard certificates. We also find that exports are highly important, while competition from the informal sector does not show association with firms’ innovativeness. These findings remain valid after endogenous and robustness testing using the propensity score matching method.
... Intense competition within the international arena is another factor that contributes to technology diffusion across national boundaries (Gertler, 2001;Guler et al., 2002;Henisz et al., 2005;Neumayer and Perkins, 2005). This stems from the fact that firms compete over import and export markets at an international level, exposing local firms to new ideas to achieve higher profits and performance and to new technologies and practices adopted by foreign competitors (Cao and Prakash, 2011;Gertler, 2001;Guler et al., 2002;Jandhyala and Phene, 2015). To secure critical market resources, local firms are more likely to imitate the practices of competing firms that are highly reputed in the global market. ...
... An example of this mimetic behavior across countries is some large Japanese companies that induced their trading partners in East Asia to adopt B2B EC, imitating the American companies with which they were in competition (Hara et al., 2003;Totonchi and Manshady, 2012). Thus, competitive pressures within international markets may trigger the adoption of B2B EC technologies to improve efficiency as firms gain new insights into the performance and revenues of other competing firms (Cao and Prakash, 2011;Guler et al., 2002;Henisz et al., 2005). 3. Normative pressures from global cohesive trade relationships. ...
... 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. ...
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.
... Export orientation Many authors defend that ISO 9001 certification has a positive influence on competitiveness in international markets (Montoya-G omez, 2009;Sampaio et al. (2009b);Pacheco, 2014). In this regard, Cao and Prakash (2011) found that the pressures that emanate from commercial competitors that have adopted ISO 9001 induce exporters located in less developed countries to join this quality certification system. They argued that the problems of information on product quality are likely to be more important for developing exporting countries (Chiang and Masson, 1988;Potoski and Prakash, 2009;Cao and Prakash, 2011). ...
... In this regard, Cao and Prakash (2011) found that the pressures that emanate from commercial competitors that have adopted ISO 9001 induce exporters located in less developed countries to join this quality certification system. They argued that the problems of information on product quality are likely to be more important for developing exporting countries (Chiang and Masson, 1988;Potoski and Prakash, 2009;Cao and Prakash, 2011). Martincus et al. (2010) studied the ways in which certification affects the exports of companies, and found that ISO 9001 certification is associated with an increase in exports in terms of countries-destination, which means that there is a relationship but only with certain destination countries. ...
... Amongst the indicators of technological innovation, it included having any internationally recognized quality certificates such as ISO 9000 in place. Cao and Prakash (2011) also investigated how trade competition encourages countries to seek a decentralized, non-traditional solution -such as ISO 9001-to mitigate information barriers to trade. However, the authors raised some important questions: Why does a recognized brand-name company want to implement ISO 9001? ...
Purpose
This study has the main aim of analyzing the influence of six factors on ISO 9001 implementation: Economic Development, Exporting to Europe, Reputation, Competitiveness, Innovation and Business Sophistication. As a complement, a new factor relating to quality by country has been added: the World Quality Scoreboard.
Design/methodology/approach
Hypotheses are proposed that establish a (positive or negative) linear relationship between the diffusion of ISO 9001 and the indicators of the different factors analyzed in each country. The SPSS program was used to evaluate the hypotheses using data from 2009 to 2018.
Findings
The results indicate strong positive relationship for the country's economic development only when countries with low levels of income are considered. For the rest of the variables, the results indicate that their behavior varies according to the degree of development of the countries. When only developed countries are considered, significant and negative correlations are obtained for reputation, competitiveness, innovation and business sophistication, while considering the group of less developed countries, the results are reversed. The new World Quality Scoreboard has the same behavior whereas regarding exports; we did not obtain conclusive results.
Originality/value
This study adds important information on the studying of ISO 9000 phenomenon diffusion/evolution by analyzing the effect of six variables on the degree of implementation of the ISO 9001 standard in different countries. This information is interesting for companies and certification bodies across the world because it allows a better understanding of the reasons and conditions of implementing a quality management system.
... Countries embedded in international trade networks have domestic firms who participate in global trade networks as suppliers or as affiliates of multinational corporations. Typically, firms as well as countries take cognizance of the significance of exports to the well-being of their home firms and implement measures for securing their export market shares overseas [41,[48][49][50]. Increased competition between firms in export markets and a greater dependence on export markets have shifted the bargaining power to the importing firms. ...
... At an international level, competition between firms from different countries may be due to competition over the same market resources (i.e., import and export markets). International competition offers local firms the opportunity to learn about the profitability and technical performance of alternative practices or technologies that are adopted by foreign competitors [41,50,54,56]. In the context of competition, firms tend to imitate the practices of others, particularly those competitors who are deemed to be successful and of high-reputation, in order to avoid being left behind and/or losing critical market resources. ...
... Countries that are largely embedded in the global trading system face competitive pressures that may trigger the adoption of the legitimized B2B e-commerce technologies that have been successfully implemented or that work efficiently elsewhere. As competition offers opportunities to learn about the profitability and technical performance of alternatives [41,42,50], we expect more technology transfer to a country when its firms are competing with overseas competitors that are pioneers in B2B e-commerce technologies. Accordingly we postulate the following: Hypothesis 2. The level of B2B e-commerce diffusion will be high in countries whose major firms' competitors are from countries that are pioneers in B2B e-commerce technologies. ...
... The emergence of supply chains, in which suppliers in one country produce intermediate inputs shipped to many countries, has been accompanied by the global diffusion of certifiable international management standards, such as ISO 9000, which focuses on quality, ISO 14000, which addresses environmental management , and recent ethical standards (Prado and Woodside, 2015). These types of voluntary standards help to overcome barriers related to information asymmetries among different actors in the supply chain (Potoski and Prakash, 2009;Cao and Prakash, 2011). ...
... Moreover, ISO 9000 diffusion is affected by foreign direct investment (FDI). Management practices can cause ISO 9000 used by multinational enterprises in their home countries to be eventually transferred and adopted by subsidiaries in foreign countries (Cao and Prakash, 2011). ...
... Auditing costs depend on the size of the organization and technical complexity, but they are substantial. The cost of a certification audit can range from $10,000 to $1 million per organization (Cao and Prakash, 2011). In sum, positive economic effects from signaling trough certificates occur when the reduction of transaction costs outweigh the costs associated with certification. ...
Companies use standards as a tool to signal their investments in quality upgrading and performance. We argue that the impact of this signal depends on the trust in the accreditation system and the development status of a country. Representing the workhorse of research in international trade, we use a gravity model to examine the trade effects of ISO 9000 diffusion and cooperation in accreditation. The model is estimated by applying a country-pair fixed effects regression approach with instrumental variables and multilateral resistance terms to a panel data set covering a 13-year period from 1999 to 2012. This allows us to test our hypotheses with respect to the moderating role of international cooperation in accreditation on the trade effects of ISO 9000 diffusion. We show that certification promotes trade and that signatories to the Multilateral Recognition Arrangement of the International Accreditation Forum (IAF MLA) trade significantly more. The IAF MLA is of particular importance to the trade among developing countries. For policy makers, our results highlight the importance of support for accreditation institutions in developing countries.
... With respect to ISO 9000 certification, studies indicate that the adoption of this QMS in a country could be motivated if its export markets have many certified companies (Prakash and Potoski, 2006). Furthermore, the ISO 9000 adoption could be encouraged if a country's structurally equivalent competitor has a high number of certifications (Cao and Prakash, 2011). ...
... Externally, it demonstrates a commitment to quality assurance to external stakeholders (Cao and Prakash, 2011). In addition, the ISO 9000 standards can facilitate the exchange of goods and services through a common set of quality standards (Sharifi et al., 1999). ...
Purpose-The present paper aims to present an Exploratory Spatial Data Analysis (ESDA) of ISO 9001 certification trends and innovation performance in order to identify geographic patterns and spatial autocorrelation between performance innovation and annual growth rate of ISO 9001 certificates in South America. Design/methodology/approach-Using secondary data regarding the number of ISO 9001 valid certificates and innovation indexes, our methodological procedure combines descriptive analysis and ESDA to verify spatial autocorrelation hypotheses and spill-over effects across countries. Findings-The results reveal spatial patterns regarding the ISO 9000 certification trends in South American countries. The ESDA results call attention to the association of the annual growth rate of ISO 9001 certificates with gross capital formation, expenditure on education, and high-tech manufacturing. In addition, the study points to spatial clusters regarding these measures. Research limitations/implications-As the study relies on South American country data, future research should explore spatial patterns and spill-over effects using samples from other regions or continents. Practical implications-This study discusses the association between ISO 9001 Quality Management Systems (QMS) and innovation performance from a geographic perspective. Moreover, the findings indicate associations between the demand for ISO 9001 certificates and innovation performance indicators. Originality/value-This paper presents an exploratory study regarding the effect of innovation performance and ISO 9001 QMS certification in South American countries using ESDA techniques.
... 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. ...
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.
... To this end, we have collected data across countries, review the literature and later analyze this data in order to draw valid conclusions on the basis of the influences of ISO 9001, ISO 14001, and SA 8000 (QES). We are particularly interested in learning more about international quality standards relationships to exports in the context of developed and developing countries Cao and Prakash, [13], Castka [14]. ...
... The impact on trade regarding the adoption of ISO 9000 fundamentally centers on accreditation as a device for exporters to signal quality to purchasers and to decrease data asymmetries and transaction costs. ISO accreditation is a reliable tool with which clients can recognize high quality production Cao and Prakash [13]. Finally, the adoption of international management standards have positive economic impacts which are exhibited when the reduction in transaction cost exceeds the accreditation cost Sroufe and Curkovic [30]. ...
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.]
... Consistent with the glocalization perspective, even as world society processes promote the overall structuration of the GCR movement, we expect that more nested and enduring countrylevel differences in trade and domestic governance to give rise to divergences in GCR framework diffusion. According to studies of cross-national policy diffusion, the differential (Greenhill, Mosley, & Prakash, 2009;Mosley & Uno, 2007) but conditioned by the existing effectiveness of domestic governance institutions (Jackson & Apostolakou, 2010), as well as by expectations of business responsibility from international trading partners (Cao & Prakash, 2010). At the domestic level, businesses in countries with historically weak regulatory structures may be more likely to adopt onerous external certification schemes in order to facilitate economic exchange with businesses in countries with higher sourcing standards. ...
... Businesses operating in environments with weak social and environmental protections may realize competitive advantages over their local peers by adopting forms of GCR that are codified, stringent, and certifiable. These advantages may stem from greater access to foreign trading partners through the demonstration of substantive attention to corporate responsibility (Cao & Prakash, 2010). In less effective governance contexts, lax reporting frameworks might not be perceived as providing the necessary degree of external assurance of labor and environmental management. ...
In recent decades, as worldwide attention to corporate responsibility increased, the global corporate responsibility (GCR) movement did not converge on a singular governance model nor hybridize into myriad country-specific models. The movement, rather, bifurcated into onerous certification frameworks and more lax reporting frameworks. We examine this “governance divide” in the GCR movement by investigating the cross-national diffusion of seven core GCR frameworks. We adopt a glocalization perspective that conceptualizes a vertical nesting of local and global contexts. Our cross-national quantitative analyses suggest that, while linkages to global culture have encouraged business participation in all GCR frameworks, power dependencies related to international trade and domestic factors related to effectiveness of local governance institutions have contributed to divergent diffusion patterns across reporting and certification frameworks. We discuss these findings in relation to several organizational perspectives and note their implications for further research on corporate responsibility.
... Además, Norteamérica, Sudamérica y Asia son consideradas como regiones de adopción más tardía. En estudios previos existe una aprobación donde se evidencia que la acogida de la ISO 9001 es esencial en prácticas de seguridad respecto a la calidad interna que poseen las empresas (Cao & Prakash, 2010). ...
En un mundo globalizado las empresas que desean sobresalir y posicionarse en los mercados internacionales deciden obtener la certificación ISO 9001, la cual es una de las certificaciones que brinda seguridad a los clientes de que el bien o servicio que va a comprar o consumir cumplió con los requisitos de calidad, por tanto, el exportador le podrá brindar esa garantía al cliente obteniendo así ventaja competitiva y por ende realizar más exportaciones. El trabajo se desarrolló con el objetivo de analizar el impacto que genera la implementación de la certificación ISO 9001 con las exportaciones de bienes y servicios en los países de Sudamérica. El estudio presenta un paradigma cuantitativo y su tipo de investigación fue correlacional, con el método de estudio de documentos, su técnica según su estructura es el tradicional y su instrumento la guía para el estudio de documentos. La recolección de datos se realizó por medio de las publicaciones estadísticas del CEPALSTAT y de la encuesta que realiza la ISO anualmente, limitando la obtención de datos en seis países de Sudamérica: Ecuador, Colombia, Perú, Brasil, Chile, Argentina; en el cual el periodo de estudio contempla desde 1993 hasta 2022. Los resultados mostraron la existencia de una correlación fuerte y significativa entre las dos variables de estudio, por tanto, la obtención de certificaciones ISO 9001 tiene un efecto positivo en exportaciones. Como conclusión se encontró que el desarrollo de la ISO 9001 en las empresas de los países impulsa notablemente las exportaciones.
... Entering international markets is a high-risk decision involving sunk costs, revenue volatility determined by exchange rate movements, limited information, language and cultural barriers (Helpman et al., 2008;Goedhuys and Sleuwaegen, 2016). International certification standards allow organizations to address this uncertainty by providing identifiable and globally recognized references on product quality, reliability and proper business management (Cao and Prakash, 2011). Nevertheless, studies investigating the link between certification and internationalization are recent and limited, focusing primarily on the effects on trade stemming from the adoption of a certified QMS (Li et al., 2017;Ikram et al., 2020;Du and Li, 2020). ...
Purpose
There is a strong consensus among scholars that the international competitiveness of companies strongly depends on the support of institutions, which reduces uncertainty in transactions by giving form to economic interactions, while less attention was paid to the role of international standards within this context. This study intends to propose its contribution by deepening the role of process certifications in the competitiveness and internationalization strategies of companies, with specific reference to the wood-furniture sector.
Design/methodology/approach
Data were collected using a questionnaire survey distributed via computer-assisted web interviewing (CAWI) methodology and sent to a sample of 2,845 Italian companies which operate in the wood-furniture industry, using simple random sampling. Thanks to the survey administration, 228 companies participated to the survey.
Findings
The study shows that it is companies operating in international markets that define this tool as relevant; this underlines how certification is seen as a kind of business card for entering international markets. In this context, the role of business leadership emerges as fundamental in the practical definition of the objectives to be set by adopting a quality management systems and in the subsequent commitment to obtain them.
Originality/value
Up to now, the literature has taken these elements into analysis mainly considering the consumers' perspective. In sectors with a higher content of innovation, technology and design, such as the wood-furniture sector, the literature appears to be poor in terms of contributions.
... Put another way, quality certification can be an effective signaling mechanism, allowing firms to "gain market premiums by distinguishing their quality through credible information snapshots" (Flowers et al., 2018:16896) or even to build international credibility to leave their home markets and sell abroad (Xu et al., 2018). This would comport with evidence that more capable firms are indeed the ones who seek certification (Gopal and Gao, 2009), while more open economies have less need for certification as a signaling mechanism (Cao and Prakash, 2011). ...
Energy efficiency at the firm level is determined by a series of complex and multifaceted factors related to firm-specific attributes and a firm's external environment. A weak institutional environment may exacerbate barriers to energy efficiency, sending interested firms in search of ways in which to signal their commitment to improving their energy usage. Paramount among these mechanisms is internationally recognized quality certification, which can both reward a firm for prior improvements and alert consumers about the quality of a firm's products. This paper examines the effect of quality certification on energy efficiency in a particularly low institutional quality environment, the four transition countries of Central Asia. Using firm-level data and controlling for other determinants of energy intensity, we find that firms that have quality certifications are indeed more efficient in their use of energy. Perhaps more importantly, we find that competition from the informal sector is also incredibly important to improved energy efficiency. The effect of certification also runs back to firm planning, as certified firms are more likely to focus on energy efficiency metrics rather than overall usage in planning for the future.
... In addition, an actor's direct connections can also exert influence on their adoption of behaviors and policy. For instance, Cao and Prakash (2011) examined 134 countries' trade policies from 1993 to 2002. They found that when a country's structurally equivalent competitors adopt ISO 9000 (a voluntary quality certification program), then sellers in this country are likely to join as well. ...
Networks contain complex patterns of dependency and require multiple levels of analysis to explain their formation, structure, and outcomes. In this Element, the authors develop the Multilevel Network Framework. The framework serves as (i) a conceptual tool to think more deeply about network dynamics, (ii) a research tool to assist in connecting data, theory, and empirical models, and (iii) a diagnostic tool to analyze and categorize bodies of research. The authors then systematically review the network literature in public administration, management, and policy. They apply the Multilevel Network Framework to categorize the literature; identify significant gaps; examine micro, macro and cross-level relations; and examine relevant mechanisms and theories. Overall this Element helps readers to (i) understand and classify network research, (ii) use appropriate theoretical frameworks to examine network-related problems, (iii) understand how networks emerge and produce effects at different levels of analysis, and (iv) select appropriate empirical models.
... Based on the structural equivalence mechanism, in the context of international trade, Cao and Prakash (2011) show how competing actors will tend to emulate each other if they have the same patterns of connections with others because they want to be perceived as equally legitimate. In this approach, social influence is caused mainly by perceived legitimacy. ...
This article contributes to the network effectiveness literature by identifying the theoretical mechanisms and network measures scholars in public administration and policy use to draw inferences between network structures and network effects. We conducted a systematic review of empirical network effects research in 40 public administration and policy journals from 1998 to 2019. We reviewed and coded 89 articles and described the main social theories used in the network effectiveness literature and the associated mechanisms that translate network structures to network effects. We also explain how scholars operationalize those theoretical mechanisms through network measures. Overall, our findings reflect that there is limited use of social theories for the explanation of network effects and in some cases, inconsistent use of network measures associated with theories. Moreover, we identify several challenges confronting network effects research. These challenges include the difficulty of isolating specific mechanisms related to a particular social theory, the use of network structures both as a mechanism and as a measure, and the lack of data to examine network dynamics and coevolution.
... Corporations adopt voluntary frameworks to signal their CSR to external actors such as citizens, policymakers and NGOs (Cao and Prakash 2011). To measure CSR adoption, we follow established practice (Berliner andPrakash 2012, Lim andTsutsui 2012, van den Broek 2021) and use two widely endorsed global CSR frameworks. ...
This paper explores the role of corporate social responsibility (CSR) as an element in a corporation’s political action repertoire. Previous research has studied lobbying and CSR as a distinct means by which corporations seek to manage their non-market environment. Analyzing CSR as a political activity, we argue that corporations engage in CSR for the same reasons that prompt them to engage in lobbying. More specifically, we expect corporations to adopt CSR frameworks that are suitable to enhance their reputation in a given political arena. To evaluate this argument, we analyze the lobbying and CSR behavior in the EU and USA of over 2000 corporations from around the world. Our results show that lobbying and adopting CSR frameworks can be predicted by similar empirical models. Moreover, controlling for common predictors and endogeneity, lobbying in the EU is associated with an increased likelihood of a corporation adopting an appropriate CSR framework. However, corporations that lobby in Washington DC become less likely to engage in CSR the more they spend on lobbying. These findings shed new light on the relationship between lobbying and CSR while highlighting important differences in corporate non-market behavior across political arenas.
... The purpose of an international standard is to provide clear identifiable references acknowledged worldwide and, thus, indirectly foster international trade by signaling product quality, reliability, and the firm's values and sound business management acumen [41,42]. Notice that certification does not guarantee that the firm is better or more efficient than its competitors. ...
In the last decades, the academic literature has devoted considerable attention to the
determinants of export performance. In result of those research efforts in identifying and examining the influence of such determinants, the literature presents a wide set of variables associated with higher levels of exports. This paper provides a contribution to that literature by trying to evidence the impact of firm certification—namely, in terms of the firm’s quality, environmental, and health and safety management systems—on export performance. The paper analyses an unbalanced sample of 1684 Portuguese industrial SMEs for the period 2010 to 2020, uses other determinants of internationalization as control variables, and explores the possibility of moderating effects on the certification–internationalization relationship. Two alternative econometric methods are employed: a
random-effects model and a Tobit model. The results evidence the importance for firms, especially in the low or medium–low technology sectors, to have certain ISO certifications in order to further develop their export activities and increase their foreign acceptance, particularly in the European Union markets. Further, certification seems to reinforce the positive relation between firm size and internationalization.
... Building on this approach, Siciliano and Thompson (2018) constructed a weight matrix that adjusts the relative influence of any given alter's organizational commitment based on the strength of the ego's connection to that alter relative to the strength of the ego's other connections. An alternative way, based on the structural equivalence mechanism, is to look at whether two actors have the same patterns of connections with other actors (Cao & Prakash, 2011). In the context of international trade, competing actors will tend to emulate each other if they have the same patterns of connections with others because they want to be perceived to be at least equally legitimate. ...
This article contributes to the network effectiveness literature by identifying the theoretical mechanisms and network measures scholars in public administration and policy use to draw inferences between network structures and network effects. We conducted a systematic review of empirical network effects research in 40 journals of public administration and policy from 1998 to 2019. We reviewed and coded 89 articles and described the main social theories used in the network effectiveness literature and the associated mechanisms that translate network structures to network effects. We also explain how scholars operationalize those theoretical mechanisms through network measures. Overall, our findings reflect that there is a limited use of social theories for the explanation of network effects and in some cases, there is an inconsistent use of network measures associated with theories. Moreover, we identify the main challenges related to network effects, including the difficulty of isolating specific mechanisms related to a particular social theory, the use of network structures both as a mechanism and as a measure, and the lack of data to examine network dynamics and coevolution.
... A formidable body of scholarship has examined policy diffusion, both internationally (Acharya, 2004) and within the U.S. (Shipan & Volden, 2008). Extant literature has assessed the dynamics that underlie diffusion, such as learning, emulation, competition, and sometimes coercion, as well as the factors that influence diffusion, including geography, ideology, and interest groups (Cao & Prakash, 2011;Graham et al., 2013). A surprisingly small amount of attention has been devoted to the role that the "characteristics of the policies themselves play in determining the speed of diffusion and the mechanisms through which diffusion occurs" (Makse & Volden, 2011, p. 108). ...
Human trafficking is a compelling and persistent problem that has attracted a great amount of attention among political leaders, government institutions, NGOs, and nonprofit organizations. While there is consensus that trafficking necessitates a multipronged policy response commonly known as the “3Ps” (prosecution, protection, and prevention), anti‐trafficking policies diffused across U.S. states in a piecemeal fashion. In this paper, we explore the fragmented diffusion of the different types of anti‐trafficking laws. Drawing from social constructivist approaches, we posit that the differential diffusion rates depend on the social construction of the target population and policy intention of the law. Using event history analysis, we examine the diffusion of 14 types of human trafficking laws throughout the U.S. during 2003–2013. We find strong support for our hypotheses and show substantial differences in the rates at which prosecution, protection, and prevention‐related laws diffuse.
... Moreover, other studies highlight that ISO 9000 certification could signal a company's management system's quality and reduce the consumers' quality difference (Cao and Prakash 2011;Hudson and Jones 2003). Thus, the quality standard might enhance chances for an acceptance of new product and service of firms. ...
The study examines how quality certification and firm-level attributes (firm age and size) support firms' innovative ecosystems that use trademarks in developing countries. The study combines data from the World Bank Enterprise Survey (WBES) and Innovation Follow-up Surveys (IFS) for 11 countries to test the hypotheses. The estimations are performed using an instrumental variable treatment model with direct-2sls for the primary analysis and a Tobit model for the robustness checks. Our findings indicate a positive effect of quality certification and trademark on product innovation. There is a synergistic effect of quality certification and trademark on product innovation. Similarly, firm age and size significantly and positively moderate the link between a trademark and product innovation. Interestingly, in the multi-level estimations, we still find the synergistic effect of quality certification and trademark on product innovation to hold. Our findings provide accommodating arguments for the complementary utilization of trademark and quality certification to support the focal firms' product innovation. The results also show that firm-level attributes (firm age & size) constitute essential elements for firms to gain from a trademark possession to enhance performance.
... An additional source of efficiency gains comes from the reduction of fixed and variable transaction costs, between incompletely informed parties, obtained by respecting internationally agreed norms in the production and delivery process of products with a foreign destination. Finally, from a financial perspective, 2 According to Cao and Prakash (2011), the cost of a certification audit might fluctuate from 10,000 dollars to even 1 million dollars, depending on the companies' characteristics. 3 This is a common issue in the literature on certifications, as also recognized by Tian and Lin (2019). ...
Environmental and quality management practices are extremely relevant for a firm’s development and international recognition. However, dealing with the standards required and obtaining an international standards certification involves costs for employee training, procedure documents, and third-party audit fees that must be paid in advance by companies. This paper attempts to analyze the impact of difficulties in accessing external financing on the likelihood of possessing the standards and the certification, for firms based in 64 countries. A crucial aspect in uncovering such a causal effect is the potential endogeneity of financial constraints with respect to international standards certification. I address this issue by adopting a bivariate probit model and a set of firm-level instrumental variables. The empirical results showed that financially constrained firms were less likely to possess the standards required and the associated international certification, and that this impact was more relevant for small and young firms.
... In the case of exports, we argue that intangibles such as InfoSec are subject to adverse selection in countries, where consumers need signals to assess the quality of products and services (Anderson and Moore, 2006). Certificates such as ISO/IEC 27001 might be a means for companies to signal certain attributes (Stiglitz, 2000;Blind and Mangelsdorf, 2016), to mitigate information asymmetries (Cao and Prakash, 2011) and could in turn impact trade (Lim and Prakash, 2017;Blind et al., 2018). However, future studies could also consider bilateral trade flows and certification figures in partner countries to investigate possible cohesion in trade effects (Guler et al., 2002). ...
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.
... However, the adoption of a management system standard and particularly seeking certification is time consuming and costly, especially regarding the costs for external auditors [46]. These costs involve the setting up of a management system, the involvement of consultants, and, in the case of additional certification, the cost of external auditing [47]. ...
In the light of digitalization and recent EU policy initiatives, information is an important asset that organizations of all sizes and from all sectors should secure. However, in order to provide common requirements for the implementation of an information security management system, the internationally well-accepted ISO/IEC 27001 standard has not shown the expected growth rate since its publication more than a decade ago. In this article, we apply web mining to explore the adoption of ISO/IEC 27001 through a series of 2664 out of more than 900 000 German firms from the Mannheim Enterprise Panel dataset that refers to this standard on their websites. As a result, we present a ‘‘landscape’’ of ISO/IEC 27001 in Germany, which shows that firms not only seek certifications themselves but often refer on their websites to partners who are certified instead. Consequently, we estimate a probit model and find that larger and more innovative firms are more likely to be certified to ISO/IEC 27001 and that almost half of all certified firms belong to the information and communications technology (ICT) service sector. Based on our findings, we derive implications for policy makers and management and critically assess the suitability of web mining to explore the adoption of management system standards.
... Sometimes the theoretical basis is still primarily at the firm level, as in the stream of work that takes an institutional perspective to determine whether standards diffuse across countries due to coercive, normative, and mimetic forces (Guler et al., 2002). Other studies take a public policy perspective and focus on the role of governments, trade relations and country regulation and their impact on the diffusion (Cao and Prakash, 2011). The studies on ISO 14000 enhance the trade focus already present in work on ISO 9000 by introducing a number of broader factors, such as the impact of NGOs and environmental activism of citizens on adoption (Potoski and Prakash, 2004)) or the role of cultural similarity between countries (Albuquerque et al., 2007). ...
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.
... These private governance initiatives allowed firms, NGOs and developed country governments to address some of the negative consequences of economic integration, without significantly limiting its scope (Bartley 2007;Fransen 2011;Knudsen and Moon 2017). 1 Some brands, including Knights Apparel, Apple, Levi Strauss & Co. and Nike, sought to define themselves as leaders in responsible production (Bartley et al. 2015;Berliner et al. 2015b). Firms based in developing countries used participation in global voluntary schemes to signal commitments to protecting workers and the environment (Berliner and Prakash 2014;Cao and Prakash 2011;Potoski and Prakash 2009). Indeed, Distelhorst and Locke (2018) find that manufacturing firms' compliance with labor and environmental standards is associated with a significant increase in purchases by supply-chain partners (also see Görg et al. 2016). 2 Research on effectiveness of these voluntary private governance schemes typically finds that they fall short in protecting workers, for a variety of reasons (Applebaum and Lichtenstein 2016, Berliner and Prakash 2015). ...
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.
... With bounded rationality, importers will look for proxies to assess product quality. Exporters that can provide quality assurance, for example, via certification, gain a competitive edge (Cao and Prakash, 2011). ...
The empirical evidence that institutional differences across countries affect bilateral trade is robust. The crucial question remains how countries can enhance trade amid these differences. In this paper, we measure the degree to which governance and institutions differ between countries as “governance distance”. Using a sample of EU/EFTA imports, we examine how adopting private agrifood safety standards modify the effect of governance distance on exports of fruits and vegetables, in particular apples, bananas and grapes within a structural gravity framework. Our results show that while increasing governance distance hinders bilateral trade, the interaction of standards and the governance distance is positively associated with exports, hence partially offsetting the direct trade–inhibiting effects of the latter. GlobalGAP certified countries see the trade‐inhibiting effects of governance distance on their exports reduced by about 50%, ceteris paribus.
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... Or, an organization may compete statewide or nationally with other organizations of similar size or prestige (rather than with those that are geographically close) when trying to hire top executives, for example. A system in which organizations alter their policies or practices in response to competition from other organizations has been referred to as either "race to the top" or "race to the bottom" (Cao and Prakash 2011;Konisky 2008;Konisky 2009). ...
Interdependence in the decision-making or behaviors of various organizations and administrators is often neglected in the study of public administration. Failing to account for such interdependence risks an incomplete understanding of the choices made by these actors and agencies. As such, we show how researchers analyzing cross-sectional or time-series-cross-sectional (TSCS) data can utilize spatial econometric methods to improve inference on existing questions and, more interestingly, engage a new set of theoretical questions. Specifically, we articulate several general mechanisms for spatial dependence that are likely to appear in research on public administration (isomorphism, competition, benchmarking, and common exposure). We then demonstrate how these mechanisms can be tested using spatial econometric models in two applications: first, a cross-sectional study of district-level bilingual education spending and, second, a TSCS analysis on state-level healthcare administration. In our presentation, we also briefly discuss many of the practical challenges confronted in estimating spatial models (e.g., weights specification, model selection, effects calculation) and offer some guidance on each.
... Criminalization may constitute a signal about intent when there is little information about the actual quality of enforcement. Analogously, see the argument about signaling as competition in competitive markets where product information is poor in Cao and Prakash 2011. 38 Becker 1968. ...
In the past few decades new laws criminalizing certain transnational activities have proliferated: from money laundering, corruption, and insider trading to trafficking in weapons and drugs. Human trafficking is one example. We argue that criminalization of trafficking in persons has diffused in large part because of the way the issue has been framed: primarily as a problem of organized crime rather than predominantly an egregious human rights abuse. Framing human trafficking as an organized crime practice empowers states to confront cross-border human movements viewed as potentially threatening. We show that the diffusion of criminalization is explained by road networks that reflect potential vulnerabilities to the diversion of transnational crime. We interpret our results as evidence of the importance of context and issue framing, which in turn affects perceptions of vulnerability to neighbors' policy choices. In doing so, we unify diffusion studies of liberalization with the spread of prohibition regimes to explain the globalization of aspects of criminal law.
... This means that certification actually reduces the information asymmetry and hence acts as a signal of quality. Similar findings are supported by Cao and Prakash (2011) who have found growth of exports as a consequence of ISO adoption. But both of these studies have focused on manufacturing firms and products. ...
Signalling quality in the service domain and finding optimal strategies for the same have not been explored well in marketing literature. The study proposes a price–certification combination strategy to signal the service quality when the quality level remains unobserved by the consumers. Theoretical modelling has been done in a duopoly setting to determine the possible separating and pooling equilibriums when there is a possible long-term effect of low-quality belief. The separating equilibrium shows that the low-quality firm will not opt for certification and its price will depend on its quality distance from and the price of the high-quality firm. The high-quality firm’s certification costs will also depend on the quality distance of the two firms, its price level and the possible future effects of not participating in the certification programme. The range of possible certification costs of the high-quality firm increases as the future loss of not being certified increases. Moreover, as the quality difference between the firms increases, the high-quality firm can reduce its certification costs and after some level can actually signal only by its high price without any certification. The polling equilibrium of the analysis shows a Bertrand equilibrium, where both the firms set their price and certification costs to zero. The implications and future research directions are suggested in the article.
... The importance of policy transfer is such that Graham, Shipan, & Volden (2013, p. 673) have calculated that "between 1958 and 2008 political science journals published nearly 800 articles about the politics of public policies spreading from one government to another". The dynamics that imply such growing need for policy transfer, in line with some of the arguments previously introduced with reference to the importance of knowledge management, point to key aspects of the current global information era: the impact of ITC facilitates the exchange processes of ideas and knowledge (Dolowitz & Marsh, 2000), while global economy entails that public policy is basically interdependent, framed both within national boundaries as abroad (Parsons, 1996), even getting to the extreme, Cao & Prakash (2011) notice, that national governments examine foreign policies and compete with each other in order not to be disadvantaged. ...
The growing urbanization process and the core characteristics of the information society have situated cities and their knowledge management capacities at the center of scientific and policy-making debate. The current project conceptualizes knowledge as a policy resource and focuses on the theoretical framework of policy transfer and combines it with theoretical insights on knowledge management. In light of the historic momentum knowledge management and cities are experiencing, specific and formally dedicated cities networks have been established with the purpose to structure knowledge exchange among urban communities. The current project sets out as research problem the importance of these networks for local governments interests; it undertakes this endeavor by identifying a recently established cities network to explore the production of learning and policy knowledge exchange through a specific empirical case: the City Protocol.
... As explained above, standardization creates product compatibility and market integration, which together result in new opportunities for firms that want to expand their market coverage (Cao and Prakash 2011). Moreover, such integrated markets are often much more competitive after standardization programs are implemented. ...
We examine how the European Union (EU) standardization policy is perceived by firms by exploiting a survey dataset on firms’ benefits. We explore whether perceived benefits are associated with firm size and firm capabilities. We find strong evidence that the perceived benefits of standardization is not equally distributed across firm size classes, industries and countries. Our study indicates that small ventures are less likely to perceive benefits from EU standardization than their larger counterparts, in particular in Eastern European and Mediterranean countries. Additionally, we find evidence that firms with the capabilities to be innovative, exporting and that employ foreign labor are more likely to perceive benefits from standardization than their non–innovative, non–exporting and non–foreign labour–employing counterparts. We suggest EU and EU Member States, in particular in Eastern and Mediterranean Europe, to focus on facilitating standardization compliance by enhancing the critical firm capabilities identified. Stimulation efforts could also be considered to address simultaneously supporting capabilities and standardization literacy.
... Alternatively, this marketing advantage may be derived from a successful effort to mimic competitors or to respond to competitive pressures. (See discussion in Cao and Prakash, 2011). ...
Purpose
ISO 9001 can offer users substantial management benefits. For developing country firms, this standard could offer both important management improvements and serve as a quality signal to foreign suppliers and potential buyers. The purpose of this paper is to explore the impact of ISO 9001 on food manufacturing firms in Guyana.
Design/methodology/approach
A multiple case study approach, using interviews with multiple managers, was used to assess the impacts of ISO 9001 in six registered and non-registered firms.
Findings
ISO 9001 offers supply chain management benefits. Non-registered firms reported using the standard to formalize their monitoring procedures and improve planning, sourcing, manufacturing, and delivery efficiency. Registration helped firms formalize their quality management systems; it provided guidance on improving their customer/supplier relationships, and offered tools to monitor internal processes. Registered and non-registered firms reported increased customer satisfaction, market share and inventory turnover, and reduced lead times, rework, waste, and customer complaints.
Research limitations/implications
The number of cases examined in this study is limited. Interview data are based on managers’ perceived experiences; it was not possible to verify this information independently.
Originality/value
The paper examines management benefits of adopting an international quality management standard in developing country agrifood firms.
Trade benefits all and no nation is ever ruined by foreign trade. Globally, the policy makers have considered foreign trade as an engine of economic growth, employment generation and foreign exchange accumulations. Sales in High Sea Transaction, also known as High Sea Sales or “String Sales” which takes place beyond the territorial waters of the country of export and the country of import, are considered vital to the economic needs of developing countries like India for a variety of reasons. With disruptions in global supply chain operations due to global pandemic, protective national polices, country-specific trade policies, there is an increasing trend towards the High Sea Sales transactions. In this context, an Exploratory Pilot Survey is conducted to identify the key drivers/motivations for Sales on High Seas factoring feed of larger import firms, bankers, logistics practisers and trade specialists. Subsequently; ISM enabled Modeling is leveraged to understand the key drivers shaping the Sales on High Seas Transactions in India. In this least researched area of prime importance for development and evolution of an enabling trading environment, this study provides insights on key drivers of HSS transactions based on relational mathematical techniques called Interpretive Structure Modeling (ISM). The study lays the base for future research in this unexplored area of trading in regulated markets of the developing countries like India.
Resumo: Este artigo identifica o estado da arte no que respeita às motivações, benefícios e dificuldades na implementação e certificação dos sistemas de gestão da qualidade (SGQ) nas organizações. A revisão da literatura sugere que, em relação às motivações internas ou externas, algumas podem ser mais ou menos intensas do que outras, dependendo do tipo de organização e do seu contexto operacional. Como regra geral, a literatura aponta para um melhor desempenho das organizações que operam SGQ de acordo com a ISO 9001, embora alguns estudos tenham demonstrado que a correlação entre a certificação e o desempenho da organização é apenas marginal, ou não existe mesmo. Por outro lado, as maiores dificuldades na implementação e certificação do SGQ recaem na burocracia, no fraco compromisso com a qualidade, no custo e no tempo. Dadas as conclusões divergentes, contraditórias e não consensuais, retiradas desta revisão, bem como de outras similares, levantamos questões metodológicas sobre a investigação destes tópicos, e recomendamos outras dimensões de análise, no sentido de colmatar as dificiências encontradas. Palavras-chave: Sistema de gestão da Qualidade, Motivações, Benefícios, dificuldades. Abstract: This paper is focused on the state of the art in regards to the motivations, benefits and difficulties of implementation and certification of quality management systems (QMS) in organizations. The literature review suggests that, in regard to internal or external motives, some may be more or less intense than others, depending on the type of organization and its operating context. As a general rule literature points out to a better performance of organizations that have a QMS according to ISO 9001, although some studies have shown that correlation between the QMS certification and performance is only marginal, or does not exist. On the other hand, the greatest difficulties in implementation and certification of QMS are felt in the bureaucracy, weak commitment to quality, cost and time spent. Finally, we raise methodological questions about research on these topics, and other dimensions of analysis are recommended.
Introduction. The negative dynamics of the reduction in the total number of children and the increase in their incidence in the world and federal space require the solution of problems to preserve the health of the child population within the framework of the education system. Education is the only system of public education, where almost the entire child population is covered for a long time. Despite the many studies and aspects of the activities of educational organisations in the field of students’ health preservation, there is no need to talk about the large-scale effectiveness of this activity.
Aim. The aim of the study is to reveal the conceptual framework of the activities of educational organisations for the protection of students’ health in the context of the theory of quality management, based on the integration of existing experience, its rational organisation and management.
Methodology and research methods . The methodological basis for the construction of the concept was the process and system approaches. The application of these approaches made it possible to substantiate the proposed 1) targets for the activities of educational organisations in the field of students’ health preservation; 2) structural transformations within the educational organisation; 3) principles and requirements for the management process. The experimental search base of the study involved 14 general educational organisations and organisations of secondary vocational education of the Ural region, the total number of participants – 7,210. The authors used the general scientific methods of generalisation, comparison, synthesis and analysis to carry out an interdisciplinary analytical review of the problem field of the study.
Evaluation of the effectiveness of the implementation of the concept was carried out according to the authors’ system of criteria, which corresponds to the structure of the components of the quality of health care activities (quality of conditions, quality of processes and quality of results). To confirm the reliability of the results of the study, student’s t-criterion was used; to identify dependencies, the authors applied the method of correlation analysis (according to Pearson).
Results and scientific novelty . In the course of the study, the authors resolved the contradiction between the needs of society and man in achieving the effectiveness of the activities of educational organisations to preserve the health of students and the possibilities of the education system to ensure the implementation of these needs, since the conceptual provisions of the activities of educational organisations in health care in the context of the theory of quality management have not been developed. At the same time, the issues of organisation and management of this activity have been resolved. The scientific novelty of the study is the developed and tested concept: 1) the target and result of health protection activities is the formation and level of readiness of students to maintain health; 2) the management of the activities of educational organisations in health care is based on the theory of quality management, which requires the implementation of the ideas of the process approach and reflected in the authors’ management principles; 3) the level of organisation of health activities depends on the degree of structuring of its main directions; this requires the creation of a specialised division at the expense of the internal resources of the educational organisation – the health service; 4) the main objects of management are the quality of conditions, the quality of processes and the quality of the results of health care activities, which have become the basis of the system of criteria for its comprehensive assessment; 5) the effectiveness of the implementation of the concept depends on ensuring that the needs of the main actors in health care are constantly taken into account, its continuous improvement with the leading role of management, orientation to the key goal the formation of students’ readiness to maintain health, and the inclusion of all participants of the educational process in health protection.
Practical significance . The application of the ideas of the concept can become the basis for the innovative development of the activities of educational organisations in the field of students’ health preservation, and can determine the directions for solving fundamental and applied problems of this type of educational activity.
We examine the impact of internationally recognized quality certification on innovation for 14,654 mostly small and medium-sized enterprises (SMEs) in 30 transition economies of Eastern Europe and Central Asia. In measuring firm-level innovation, we employ both a narrow, invention-oriented measure and a broader, imitation- and adaptation-oriented measure. We find that firms that implement private quality certification standards are more innovative than similar uncertified firms. We also examine the specific impact of a firm’s size and a country’s institutional quality in the certification-innovation association. The results indicate that the positive association between quality certification and innovation is more pronounced for smaller firms. The positive impact of quality certification in facilitating firm innovation increases as the institutional quality of a country decreases.
Corporate social responsibility (CSR) has steadily grown in importance. We show government regulation on corporate reporting of CSR, aimed to spur its growth and increase transparency, has grown in tandem. Such reporting regulation is more readily observable than CSR itself and can be used as a proxy for the latter. We show that larger economies with higher institutional capacity find it easier to develop reporting regulations, and that international influences and local pollution increase concerns are important contributing factors. We show that such regulation also increases CSR, even after accounting for common unobserved factors that may affect both.
We investigate whether third-party certification may negatively affect firm performance in a weak institutional environment. Firms in weak institutional environments often obtain certifications to appeal to foreign audiences. But these audiences hold negative evaluations of firms from weak institutional settings, judging them as being of poor quality due to their geographic origin. We argue that these negative evaluations greatly diminish the informational value of certifications, such that the costs of certification exceed revenue gains causing performance decline. We also examine whether industry-level evaluations can challenge country-level ones. Focusing on industry legitimation, we argue that this increases the salience of the industry over the institutional context. Audiences see the industry first, not the weak institutional environment. Thus, third-party certifications can become a basis for differentiating among firms and thereby help improve firm performance as industry legitimation increases. We use the first decade post-liberalization of the Indian software industry, 1992–2003, to test our hypotheses. Based on a sample of 792 firms, we find support for our arguments suggesting that in weak institutional environments certification alone is not enough for firms targeting foreign audiences to overcome the stigma of their origins; it needs to be accompanied by positive industry-level processes.
Transnational actors and transnational governance now form core elements of global environmental politics alongside intergovernmental diplomacy and institutions. This article explores how and under what conditions this transnationalism has arisen, as well as its implications for world politics. It considers what effects transnational actors and governance have had on political outcomes, their relation to states and intergovernmental institutions, and normative questions around their legitimacy and accountability. The critical role of transnational actors and institutions in environmental politics has made the field a critical laboratory for broader questions concerning the evolution of global governance in world politics more generally. As global environmental challenges continue to magnify and affect other spheres of political activity, understanding these dynamics will become increasingly important.
Expected final online publication date for the Annual Review of Political Science, Volume 23 is May 11, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
This work examines the literature on the internalization of quality management standards via database searches (Web of Science, Emerald, ScienceDirect, and ABI/Inform-ProQuest). This review describes the characteristics of the relevant literature (theoretical or empirical, countries of study, and methods used), the internalization process (two constructs to measure internalization and items under each construct), drivers (reasons for seeking certification, quality culture, leadership, and training), and the effects of internalization (customer, people, and social results). Engineering managers can consider these aspects and associated drivers when they seek to improve the current processes and performance of their firms. On the basis of this review, this article identifies gaps in the literature and proposes future research areas.
The effect of risk aversion on farmer certification to standards is analysed by considering an industrial organisation model of differentiated exchange of high- and low-quality products between farmers, intermediaries and consumers. In the presence of uncertainty over the proportion of their produce that will be rejected by consumers, a relatively risk-averse population of farmers in an export enclave will tend to adopt a high-quality standard in greater numbers. When some producers export and some produce for domestic markets, however, relatively risk-averse farmers find the low-quality standard most appealing. The relationship between risk and standard adoption is affected by market conditions including the rejection rates of produce, profit margins and the extent of demand differentiation between the two varieties.
The product composition of bilateral trade encapsulates complex relationships about comparative advantage, global production networks, and domestic politics. Despite the availability of product‐level trade data, most researchers rely on either the total volume of trade or certain sets of aggregated products. In this article, we develop a new dynamic clustering method to effectively summarize this massive amount of product‐level information. The proposed method classifies a set of dyads into several clusters based on their similarities in trade profile—the product composition of imports and exports—and captures the evolution of the resulting clusters over time. We apply this method to two billion observations of product‐level annual trade flows. We show how typical dyadic trade relationships evolve from sparse trade to interindustry trade and then to intra‐industry trade. Finally, we illustrate the critical roles of our trade profile measure in international relations research on trade competition.
Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm's products exhibit significant cross‐market differences in markups, making accessing high‐standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor‐related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
Why do corporations increasingly engage in good deeds that do not immediately help their bottom line, and what are the consequences of these activities? This volume examines these questions by drawing on historical documents, interviews, qualitative case comparison, fieldwork, multiple regression, time-series analysis and multidimensional scaling, among others. Informed by neoinstitutionalism and political economy approaches, the authors examine how global and local dimensions of contemporary corporate social responsibility (CSR) intersect with each other. Their rigorous empirical analyses produce insights into the historical roots of suspicions concerning cross-societal economic actors, why and how global CSR frameworks evolved into current forms, how conceptions of CSR vary across societies, what motivates corporations to participate in CSR frameworks, what impacts such participation might have on corporate reputation and actual practices, whether CSR activities shield corporations from targeting by boycott campaigns or invite more criticism, and what alternative responses corporations might have to buying into CSR principles.
Why do corporations increasingly engage in good deeds that do not immediately help their bottom line, and what are the consequences of these activities? This volume examines these questions by drawing on historical documents, interviews, qualitative case comparison, fieldwork, multiple regression, time-series analysis and multidimensional scaling, among others. Informed by neoinstitutionalism and political economy approaches, the authors examine how global and local dimensions of contemporary corporate social responsibility (CSR) intersect with each other. Their rigorous empirical analyses produce insights into the historical roots of suspicions concerning cross-societal economic actors, why and how global CSR frameworks evolved into current forms, how conceptions of CSR vary across societies, what motivates corporations to participate in CSR frameworks, what impacts such participation might have on corporate reputation and actual practices, whether CSR activities shield corporations from targeting by boycott campaigns or invite more criticism, and what alternative responses corporations might have to buying into CSR principles.
Why do corporations increasingly engage in good deeds that do not immediately help their bottom line, and what are the consequences of these activities? This volume examines these questions by drawing on historical documents, interviews, qualitative case comparison, fieldwork, multiple regression, time-series analysis and multidimensional scaling, among others. Informed by neoinstitutionalism and political economy approaches, the authors examine how global and local dimensions of contemporary corporate social responsibility (CSR) intersect with each other. Their rigorous empirical analyses produce insights into the historical roots of suspicions concerning cross-societal economic actors, why and how global CSR frameworks evolved into current forms, how conceptions of CSR vary across societies, what motivates corporations to participate in CSR frameworks, what impacts such participation might have on corporate reputation and actual practices, whether CSR activities shield corporations from targeting by boycott campaigns or invite more criticism, and what alternative responses corporations might have to buying into CSR principles.
Reports results from a quantitative network analysis of international commodity trade flows designed to measure the structure of the world economic system and to identify the roles that particular countries play in the global division of labor. It improves on previous network-analytic studies of the world-economy in two ways. First, by using a newly developed measure of regular equivalence, this operationalization of a nation's roles in the international system is methodologically superior to previous work. Second, we have built a dynamic aspect into the analysis by examining international trade networks at more than one point in time (1965, 1970, and 1980). This allows us to answer questions about change both in the overall structure of the world-economy and in the positions of particular countries in the system. -from Authors
Political scientists, sociologists, and economists have all sought to analyze the spread of economic and political liberalism across countries in recent decades. This article documents this diffusion of liberal policies and politics and proposes four distinct theories to explain how the prior choices of some countries and international actors affect the subsequent behavior of others: coercion, competition, learning, and emulation. These theories are explored empirically in the symposium articles that follow. The goal of the symposium is to bring quite different and often isolated schools of thought into contact and communication with one another, and to define common metrics by which we can judge the utility of the contending approaches to diffusion across different policy domains.For helpful comments on an earlier draft of this article, the authors wish to thank Barry Eichengreen, Lisa Martin, and John Meyer. Nancy Brune and Alexander Noonan provided excellent research assistance. The authors also wish to acknowledge and thank the Yale Center for International and Area Studies, the UCLA International Institute, and the Weatherhead Center for International Affairs at Harvard University for funding conferences at which this collection of symposium papers were discussed.
We present a blockmodel of the world system circa 1965 that is based on four types of international networks: trade flows,military intervention, diplomatic relations, and conjoint treaty memberships. We then report regression analysis of the effects of these structural positions on nations' economic growth (change in GNP per capita) from 1955 to 1970. Net of other plausible determinants, these effects are large in magnitude and entirely consistent with world-system/dependency theories. Further analyses reinforce the interpretation of these findings as the structural, accumulative advantage of location in the core over that in the periphery. Substantively, our results suggest that exogentic theories of economic growth are even more powerful than previous analyses have indicated. -Authors
We examine some issues in the estimation of time-series cross-section models, calling into question the conclusions of many published studies, particularly in the field of comparative political economy. We show that the generalized least squares approach of Parks produces standard errors that lead to extreme overconfidence, often underestimating variability by 50% or more. We also provide an alternative estimator of the standard errors that is correct when the error structures show complications found in this type of model. Monte Carlo analysis shows that these “panel-corrected standard errors” perform well. The utility of our approach is demonstrated via a reanalysis of one “social democratic corporatist” model.
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.
This paper uses the analytical tools of regulation theory to analyse critically claims about the emergence of post-Fordism. It is argued that prevailing notions of post-Fordism are inconsistent with the central tenets of regulatioist method, devaluing as they dothe critical importance of social regulation and the ways in which a putative post-Fordist economy may be macro-economically pieced together. Rather than representing the basis for a renewed period of sustained growth, flexibility and its corollary, neo-liberalism, are argued to represent the politics and economics of sustained capitalist crisis. Only when the systemic instability at the global level can be regulated can we expect a durable replacement for Fordism. This requires not only a new macro-economic regime but, crucially, a new ‘institutional fix’.
This article investigates the nature of the linkages between trade and labor rights in developing countries. Specifically, we hypothesize that a “California effect” serves to transmit superior labor standards from importing to exporting countries, in a manner similar to the transmission of environmental standards. We maintain that, all else being equal, the labor standards of a given country are influenced not by its overall level of trade openness, but by the labor standards of its trading partners. We evaluate our hypothesis using a panel of 90 developing countries over the period 1986–2002, and we separately examine the extent to which the labor laws and the actual labor practices of the countries are influenced by those of their export destinations. We find that strong legal protections of collective labor rights in a country's export destinations are associated with more stringent labor laws in the exporting country. This California effect finding is, however, weaker in the context of labor rights practices, highlighting the importance of distinguishing between formal legislation and actual implementation of labor rights.
Stakeholders who seek to reward or punish businesses for their environmental programs often cannot observe these organizations’ internal policies and operations. To address these informational problems, and signal their beyond-compliance environmental commitments, some businesses are participating in voluntary environmental programs (VEPs). This article examines whether business managers associate the brand value of VEPs – due to their differing program sponsors – with the perceived preferences of their critical stakeholders. Drawing on a novel data set of nearly 300 organizations, we assess business’ participation in 19 government- and industry-sponsored VEPs. We find that managers who recognize the importance of stakeholder influences on their business’ environmental practices are more likely to participate in a VEP but that pressures from different stakeholders are associated with variations in organizations’ participation in either government- or industry-sponsored VEPs.
This article reports results from a quantitative network analysis of international commodity trade flows designed to measure
the structure of the world economic system and to identify the roles that particular countries play in the global division
of labor. It improves on previous network-analytic studies of the world-economy in two ways. First, by using a newly developed
measure of regular equivalence, this operationalization of a nation's roles in the international system is methodologically
superior to previous work. Second, we have built a dynamic aspect into the analysis by examining international trade networks
at more than one point in time (1965,1970, and 1980). This allows us to answer questions about change both in the overall
structure of the world-economy and in the positions of particular countries in the system. Our findings generally conform
to the theoretically expectations of the world-system perspective as well as qualitative descriptions of recent changes in
the international division of labor.
There is growing recognition that organizational innovations can have a major influence on the geography of economic activity. Yet, little is known about the mechanisms and geographic preconditions underlying their diffusion, particularly at the global level. In this article, we test a series of hypotheses about the conditions under which organizations are most likely to adopt ISO 9000, the internationally recognized set of standards for quality management, using panel data for 130 countries from 1995 to 2001. Our findings support the idea that transnational networks that connect different countries at the international level provide conduits for the cross-national transfer of new organizational practices. Thus, exports to the European Union, local involvement of transnational corporations (TNCs), European colonial ties, and the availability of telecommunications all emerge as statistically significant determinants of ISO adoptions. Our findings also underscore the importance of national environmental conditions in influencing the receptiveness of organizations to new practices. A low regulatory burden, a high share of manufacturing activity, high rates of secondary school enrollment, and low levels of productivity are positively correlated with the number of ISO 9000 certificates. We conclude by discussing the implications of our findings for current debates about the mechanisms, preconditions, and scales of organizational transfer, diffusion, and convergence.
Applying the new economics of organization and relational theories of the firm to the problem of understanding cross‐national variation in the political economy, this volume elaborates a new understanding of the institutional differences that characterize the ‘varieties of capitalism’ found among the developed economies. Building on a distinction between ‘liberal market economies’ and ‘coordinated market economies’, it explores the impact of these variations on economic performance and many spheres of policy‐making, including macroeconomic policy, social policy, vocational training, legal decision‐making, and international economic negotiations. The volume examines the institutional complementarities across spheres of the political economy, including labour markets, markets for corporate finance, the system of skill formation, and inter‐firm collaboration on research and development that reinforce national equilibria and give rise to comparative institutional advantages, notably in the sphere of innovation where LMEs are better placed to sponsor radical innovation and CMEs to sponsor incremental innovation. By linking managerial strategy to national institutions, the volume builds a firm‐centred comparative political economy that can be used to assess the response of firms and governments to the pressures associated with globalization. Its new perspectives on the welfare state emphasize the role of business interests and of economic systems built on general or specific skills in the development of social policy. It explores the relationship between national legal systems, as well as systems of standards setting, and the political economy. The analysis has many implications for economic policy‐making, at national and international levels, in the global age.
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
What are the most fundamental differences among the political economies of the developed world? How do national institutional differences condition economic performance, public policy, and social well-being? Will they survive the pressures for convergence generated by globalization and technological change? These have long been central questions in comparative political economy. This book provides a new and coherent set of answers to them. Building on the new economics of organization, the authors develop an important new theory about which differences among national political economies are most significant for economic policy and performance. Drawing on a distinction between 'liberal' and 'coordinated' market economies, they argue that there is more than one path to economic success. Nations need not converge to a single Anglo-American model. They develop a new theory of 'comparative institutional advantage' that transforms our understanding of international trade, offers new explanations for the response of firms and nations to the challenges of globalization, and provides a new theory of national interest to explain the conduct of nations in international relations. The analysis brings the firm back into the centre of comparative political economy. It provides new perspectives on economic and social policy-making that illuminate the role of business in the development of the welfare state and the dilemmas facing those who make economic policy in the contemporary world. Emphasizing the 'institutional complementarities' that link labour relations, corporate finance, and national legal systems, the authors bring interdisciplinary perspectives to bear on issues of strategic management, economic performance, and institutional change. This pathbreaking work sets new agendas in the study of comparative political economy. As such, it will be of value to academics and graduate students in economics, business, and political science, as well as to many others with interests in international relations, social policy-making, and the law. Contributors to this volume - Steven Casper, Judge Institute of Management Studies, Cambridge Pepper Culpepper, Harvard University Margarita Estevez, University of Minnesota Orfeo Fioretos, University of Wisconsin, Madison Robert J. Franzese, Jr., University of Michigan Peter A. Hall, Harvard University Bob Hancke, London School of Economics Torben Iversen, Harvard University Mark Lehrer, University of Rhode Island Isabela Mares, Stanford University David Soskice, Wissenschaftszentrum, Berlin Jay Tate, University of California, Berkeley Gunther Teubner, London School of Economics Kathleen Thelen, Northwestern University Sigurt Vitols, Wissenschaftszentrum, Berlin Stewart Wood, Magdalen College, Oxford
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.
When a model for panel data includes lagged dependent explanatory variables, then the habitual estimation procedures are asymptotically valid only when the number of observations in the time dimension (T) gets large. Usually, however, such datasets have substantial sample size in the cross-section dimension (N), whereas T is often a single-digit number. Results on the asymptotic bias (N → ∞) in this situation have been published a decade ago, but, hence far, analytic small sample assessments of the actual bias have not been presented. Here we derive a formula for the bias of the Least-Squares Dummy Variable (LSDV) estimator which has a approximation error. In a simulation study this is found to be remarkably accurate. Due to the small variance of the LSDV estimator, which is usually much smaller than the variance of consistent (Generalized) Method of Moments estimators, a very efficient procedure results when we remove the bias from the LSDV estimator. The simulations contain results for a particular operational corrected LSDV estimation procedure which in many situations proves to be (much) more efficient than various instrumental variable type estimators.
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.
Systems of private regulation based on certification have recently emerged to address environmental issues in the forest products industry and labor issues in the apparel industry. To explain why the same regulatory form has emerged across these fields, the author uses a historical and comparative case study approach, closely examining early moments and paying attention to “roads not taken.” Two types of factors led to the initial emergence of private certification: (1) social movement campaigns targeting companies and (2) a neo-liberal institutional context. The analysis shows specific ways in which these factors led states, nongovernmental organizations, and companies to build or support certification associations.
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
Geoffrey Garrett challenges the conventional wisdom about the domestic effects of the globalization of markets in the industrial democracies: the erosion of national autonomy and the demise of leftist alternatives to the free market. He demonstrates that globalization has strengthened the relationship between the political power of the left and organized labour and economic policies that reduce market-generated inequalities of risk and wealth. Moreover, macroeconomic outcomes in the era of global markets have been as good or better in strong left-labour regimes ('social democratic corporatism') as in other industrial countries. Pessimistic visions of the inexorable dominance of capital over labour or radical autarkic and nationalist backlashes against markets are significantly overstated. Electoral politics have not been dwarfed by market dynamics as social forces. Globalized markets have not rendered immutable the efficiency-equality trade-off.
ABSTRACT ,,This paper demonstrates that the conditional negative binomial model for panel data, proposed by Hausman, Hall and Griliches (1984), is not a true fixed-effects method. This method—which has been implemented in both Stata and LIMDEP—does not, in fact, control for all stable covariates. Three alternative methods,are explored. A negative multinomial model yields the same estimator as the conditional Poisson estimator and, hence, does not provide any additional leverage for dealing with overdispersion. On the other hand, a simulation study yields good results from applying an unconditionalnegative binomial regression estimator with dummy variables to represent the fixed effects. There is no evidence for any incidental parameters bias in the coefficients, and downward bias in the standard error estimates can be easily and effectively corrected using the deviance statistic. Finally, an approximate conditional method is found to perform at about the same level as the unconditional estimator. 3
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.
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.
introduction to social networks, interesting the centrality chapter.
Two classes of network models are used to reanalyze a sociological classic often cited as evidence of social contagion in the diffusion of technological innovation: Medical Innovation. Debate between the cohesion and structural equivalence models poses the following question for study: Did the physicians resolve the uncertainty of adopting the new drug through conversations with colleagues (cohesion) or through their perception of the action proper for an occupant of their position in the social structure of colleagues (structural equivalence)? The alternative models are defined, compared, and tested. Four conclusions are drawn: (a) Contagion was not the dominant factor driving tetracyclene's diffusion. Where there is evidence of contagion, there is evidence of personal preferences at work.
The view that nations compete against each other like big corporations has become pervasive among Western elites--many of whom are in the Clinton administration. As a practical matter, however, the doctrine of "competitiveness" is flatly wrong. The world's leading nations are not, to any important degree, in economic competition with each other. Nor can their major economic woes be attributed to "losing" on world markets. This is particularly true in the case of the United States. Yet Clinton's theorists of competitiveness--from Laura D'Andrea Tyson to Robert Reich to Ira Magaziner--make seemingly sophisticated arguments, most of which are supported by careless arithmetic and sloppy research. Competitiveness is a seductive idea, promising easy answers to complex problems. But the result of this obsession is misallocated resources, trade frictions and bad domestic economic policies.
We examine some issues in the estimation of time-series cross-section models, calling into
question the conclusions of many published studies, particularly in the field of comparative
political economy. We show that the generalized least squares approach of Parks produces
standard errors that lead to extreme overconfidence, often underestimating variability by 50% or
more. We also provide an alternative estimator of the standard errors that is correct when the error
structures show complications found in this type of model. Monte Carlo analysis shows that these
"panel-corrected standard errors" perform well. The utility of our approach is demonstrated via a
reanalysis of one "social democratic corporatist" model.
This article reports results from a network analysis of international trade from 1965 through 2000. It addresses the impact of changes associated with globalization and the "new international division of labor" (NIDL) on structural inequality in the world economy. To assess this impact, I ask three specific questions. (1) Do patterns of international trade conform to a core/periphery structure through time? (2) Does the structure exhibit inequality with regard to industrial sophistication? (3) Have globalization and the NIDL encouraged upward mobility for historically poor countries, or have they reproduced a stable set of structural positions? The findings support the view that the NIDL and globalization have benefited a few exceptional countries while at the same time producing structural inequality.
Interdependence is ubiquitous, and often central, across comparative politics. In comparative political economy, for example, globalization and rising capital mobility imply tax competition that suggests the fiscal policies of one country must depend crucially upon those of other countries with which it competes for capital. This paper shows this theoretically and, more generally, how any situation involving externalities from one unit's actions on others' implies interdependence. Positive/negative externalities induce negative/positive interdependence, which spurs competitive-races/free-riding, with corresponding early/late-mover advantages, and so strategic rush-to-act/delay-and-inaction. We show next how to model such interdependent processes empirically, that not doing so risks severe omitted-variable biases that erroneously favor domestic and exogenous-external accounts over interdependence but that doing so naïvely risks simultaneity biases with the opposite substantive implications. Then we discuss how to estimate properly specified interdependence models with spatial lags by maximum likelihood and, finally, how to interpret and present the resulting estimated spatio-temporally dynamic effects, response paths, and long-run steady-states, with their associated standard errors. We illustrate all this by replicating a noteworthy earlier, non-spatial, study of capital-tax competition. Web appendices contain further technical details, literature survey, data, statistical-software code, and spreadsheet templates for conducting all estimation and calculation procedures.
In this article we examine how information problems can cause agency slippages and lead to governance failures in nonprofit organizations. Drawing on the principal–agent literature, we provide a theoretical account of an institutional mechanism, namely, voluntary regulation programs, to mitigate such slippages. These programs seek to impose obligations on their participants regarding internal governance and use of resources. By joining these programs, nonprofit organizations seek to differentiate themselves from nonparticipants and signal to their principals that they are deploying resources as per the organizational mandate. If principals are assured that agency slippages are lower in program participants, they might be more likely to provide the participants with resources to deliver goods and services to their target populations. However, regulatory programs for nonprofit organizations are of variable quality and, in some cases, could be designed to obscure rather than reveal information. We outline an analytical framework to differentiate the credible clubs from the “charity washes.” A focus on the institutional architecture of these programs can help to predict their efficacy in reducing agency problems.
Regulatory transparency-mandatory disclosure of information by private or public institutions with a regulatory intent-has become an important frontier of government innovation. This paper assesses the effectiveness of such transparency systems by examining the design and impact of financial disclosure, nutritional labeling, workplace hazard communication, and five other diverse systems in the United States. We argue that transparency policies are effective only when the information they produce becomes “embedded” in the everyday decision-making routines of information users and information disclosers. This double-sided embeddedness is the most important condition for transparency systems' effectiveness. Based on detailed case analyses, we evaluate the user and discloser embeddedness of the eight major transparency policies. We then draw on a comprehensive inventory of prior studies of regulatory effectiveness to assess whether predictions about effectiveness based on characteristics of embeddedness are consistent with those evaluations. © 2006 by the Association for Public Policy Analysis and Management
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.
Although spatial econometrics is being used more frequently in political science, most applications are still based on geographic notions of distance. Here we argue that it is often more fruitful to consider political economy notions of distance, such as relative trade or common dyad membership. We also argue that the spatially autoregressive model usually (but not always) should be preferred to the spatially lagged error model. Finally, we consider the role of spatial econometrics in analyzing time-series–cross-section data, and show that a plausible (and testable) assumption allows for the simple introduction of space (however defined) into such analyses. We present examples of spatial analyses involving trade and democracy.
This paper studies policy changes in capital taxation by focusing on policy interdependence induced by network dynamics at the international level. The empirical findings indicate that the competition mechanism induced by network position similarity in the network of portfolio investment and that of exports causes policy diffusion in corporate taxation; the socialization mechanism (policy learning and emulation) induced by network position proximity in the IGO networks also drives policy changes, and the evidence is much stronger in the IGO networks that facilitate policy learning than in those that facilitate emulation. The paper also discusses explicitly empirical challenges to incorporate network characteristics into connectivity matrices in spatial lag models often used to study policy diffusion. It suggests that students of policy diffusion should discuss as explicitly as possible the assumptions and procedures to construct connectivity matrices and present results from alternative specifications: our conclusion on the strength of policy diffusion is often sensitive to the choice of connectivity matrices.
An implicit assumption of most policy analysts and some academics is that globalization leads to a convergence of traditionally national policies governing environmental regulation, consumer health and safety, the regulation of labor, and the ability to tax capital. Some claim that globalization leads to a race to the bottom, where concerns about the regulatory standards are sacrificed on the altar of commerce. Others argue that the growth of transnational governance structures leads to a negotiated convergence of ample regulation. This essay reviews the arguments and evidence for how globalization affects the convergence of regulatory policies, in particular the setting of labor and environmental standards. It argues that the theories of policy convergence, which rely on structural factors to induce policy convergence, are largely unsupported by the empirical evidence. Theories that grant agents autonomous decisionmaking power perform better but remain underspecified. Ironically, the realist paradigm, which has generally denigrated the globalization phenomenon, could prove a fruitful source for theories of improved policy convergence.
What is the impact of foreign direct investment (FDI) on development? The answer is important for the lives of millions--if not billions--of workers, families, and communities in the developing world. The answer is crucial for policymakers in developing and developed countries, and in multilateral agencies. This volume gathers together the cutting edge of new research on FDI and host country economic performance and presents the most sophisticated critiques of current and past inquiries. It probes the limits of what can be determined from available evidence and from innovative investigative techniques. In addition, the book presents new results, concludes with an analysis of the implications for contemporary policy debates, and proposeds new avenues for future research.
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.
This second edition of Hilbe's Negative Binomial Regression is a substantial enhancement to the popular first edition. The only text devoted entirely to the negative binomial model and its many variations, nearly every model discussed in the literature is addressed. The theoretical and distributional background of each model is discussed, together with examples of their construction, application, interpretation and evaluation. Complete Stata and R codes are provided throughout the text, with additional code (plus SAS), derivations and data provided on the book's website. Written for the practising researcher, the text begins with an examination of risk and rate ratios, and of the estimating algorithms used to model count data. The book then gives an in-depth analysis of Poisson regression and an evaluation of the meaning and nature of overdispersion, followed by a comprehensive analysis of the negative binomial distribution and of its parameterizations into various models for evaluating count data.