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Signaling Environmental Stewardship in the Shadow of Weak Governance: The Global Diffusion of ISO 14001
Abstract
This article examines how the quality of domestic regulatory institutions shapes the role of global economic networks in the cross-national diffusion of private or voluntary programs embodying environmental norms and practices. We focus on ISO (International Organization for Standardization) 14001, the most widely adopted voluntary environmental program in the world, which encourages participating firms to adopt environmental stewardship policies beyond the requirement of extant laws. We hypothesize that firms are motivated to signal environmental stewardship via ISO 14001 certification to foreign customers and investors that have embraced this voluntary program, but only when these firms operate in countries with poor regulatory governance. Using a panel of 129 countries from 1997 to 2009, we find that bilateral export and bilateral investment pressures motivate firms to join ISO 14001 only when firms are located in countries with poor regulatory governance, as reflected in corruption levels. Thus, our article highlights how voluntary programs or private law operates in the shadow of public regulation, because the quality of public regulation shapes firms' incentives to join such programs.
... The high temperatures can cause a drop in productivity and hinder growth. Furthermore, relying solely on voluntary programs for environmental stewardship may not be sufficient to address these issues [26]. ...
... Muñoz-Torres, Fernández-Izquierdo [36,45] find that companies with high levels of ESG disclosure has better financial performance and lower financial risk. Similarly, Berliner and Prakash [26] argue that companies with high ESG disclosures may prioritize social and environmental considerations in their business practices, leading to positive impacts on income distribution. Further, Szczepańska-Woszczyna [14] find the companies that prioritize social responsibilities have the tendency to offer higher salaries and minimize income disparity, potentially resulting in positive economic and social effects. ...
... The negative association between the RLI and Theil Index implies that countries with a stronger rule of law tend to have lower levels of income inequality [4]. This, in turn, can lead to more equitable distribution of wealth and opportunities within a society [26]. Weak rule of law can also make it harder for individuals and businesses to protect their property rights and enforce contracts, which can undermine economic growth and further exacerbate income inequality [1]. ...
Facilitating economic opportunities is a critical function of the financial sector, and this contributes significantly towards the attainment of Sustainable Development Goals 10 (SDG-10), which aims to reduce income inequality. This research examines the role of sustainable banking practices in reducing income inequality and achieving SDG-10 under weak rule of law settings. We employed a panel cluster regression model to examine the data collected from 890 banks across 49 nations over a nine-year period (2014–2022). Specifically, we opted to cluster the observations based on industry and year to produce unbiased standard error. The findings reveal that sustainable banking practices are more effective in reducing income inequality, especially in settings with weak rule of law. They also contribute to combating money laundering, which is a significant barrier to achieving SDG-10. The study highlights the importance of transparent and responsible financial transactions in promoting investment opportunities that contribute to sustainable development. Moreover, we find that sustainable banking can accelerate the impact of Fintech in reducing income inequality in weak rule of law settings. The use of Fintech in the financial industry can improve transparency, accountability, and fairness, which are essential for progress towards achieving SDG-10. These findings have significant implications for the expansion of sustainable banking practices in regions with weak institutional frameworks.
... Green investment is a company strategy to gain and maintain legitimacy and support stakeholders. By doing so, the company manages the negative effect of operational activities on the environment by minimizing energy use and reducing carbon emissions (Berliner & Prakash, 2013;Minatti Ferreira et al., 2014;Testa et al., 2015). The company's concern is stated in their annual report to illustrate their responsibility for the environment. ...
... Saxena and Khandelwal (2012) confirmed that there is a positive relationship between green investment and sustainable performance. This is due to the common goals shared by the company management and investors who want a green environment (Berliner & Prakash, 2013;Minatti Ferreira et al., 2014;Testa et al., 2015). ...
... Green Investment is a company strategy to gain and maintain legitimacy. In this case, the company manages the business effects on the environment by minimizing energy use, reducing carbon emissions, and other negative effects (Berliner & Prakash, 2013;Minatti Ferreira et al., 2014;Testa et al., 2015). Green investment is measured by using PROPER (i.e Company Performance Assessment in Environmental Management). ...
Studies on green investment and corporate social responsibility (CSR) investment has been conducted by some researchers in the current and future trends of sustainable development. Many of them have focused on the relationship between CSR and financial performance, but only a few have examined how green investment, CSR investment, and sustainability are related to each other. Sustainable performance is based on three aspects: people-planet-profit, or also what is known as the triple bottom line concept. The sample for this study consisted of 132 manufacturing companies listed in the Indonesia Stock Exchange from 2016 to 2019. This study found that green investment and CSR investment positively affect financial performance and sustainable performance. Meanwhile, the financial performance has an insignificant effect on sustainable performance. Besides, financial performance cannot mediate the effect between green investment and CSR investment on sustainable performance.
... In general, studies associate the adoption of these certifications with key economic indicators such as gross domestic product (GDP), GDP per capita, gross national income (GNI), foreign direct investment (FDI) stocks, exports, imports, among others (see studies of Franceschini, Galetto, and Cecconi 2006;Prakash and Potoski 2007;Masakure, Henson, and Cranfield 2009;Freitas and Iizuka 2012;Zeng and Eastin 2012;Berliner and Prakash 2013;Fikru 2014;Salgado et al. 2016;Fura and Wang 2017;. However, it is noteworthy that despite the growing interest in analyzing indicators that influence the adoption of both ISO 9001 and ISO 14001 certifications in various countries as well as continents, a lack of consensus continues to prevail in extant literature with regard to the analysis based on a larger set of indicators from different categories, which, in turn, could help yield more accurate and satisfactory results. ...
... For ISO 14001, diffusion occurred mainly in LA countries with a larger labor force, faster development of services, relatively low use of foreign knowledge, and low FDI presence (Freitas and Iizuka 2012). Berliner and Prakash (2013) analyzed data from 129 countries using a negative binomial model. Some of the indicators analyzed in their research were exports and GDP per capita, which had a positive and statistically significant effect on ISO 14001 certifications. ...
... The indicators identified in this study are consistent and show positive influences with those examined in previous studies, mainly exports (Masakure, Henson, and Cranfield 2009;Freitas and Iizuka 2012;Zeng and Eastin 2012;Berliner and Prakash 2013;Kalani et al. 2013;Arana, Allur, and Heras-Saizarbitoria 2014;Fikru 2014;To and Lee 2014;Salgado et al. 2016) and GDP (Freitas and Iizuka 2012;Zeng and Eastin 2012;Berliner and Prakash 2013;Kalani et al. 2013;Arana, Allur, and Heras-Saizarbitoria 2014;Fikru 2014;He et al. 2015;Fura and Wang 2017;Neves, Salgado, and Beijo 2017). Other similar indicators include merchandise imports (Fura and Wang 2017), labor force (Freitas and Iizuka 2012), population (Potoski and Prakash 2013), CO 2 emissions (Neves, Salgado, and Beijo 2017;Ikram, Zhang, et al. 2020), and GNI (Salgado et al. 2016). ...
With the rapid expansion of international trade, companies are progressively adopting management system standards that ‘dazzle’ the market, such as those in ISO 9001 and ISO 14001 certifications. However, the reports for ISO 9001 and ISO 14001 only provide the number of valid certifications, without presenting information on the variables that may influence an increase or difference in the number of these certifications. In response to this gap, this article aims to identify the main variables of the World Development Indicators (WDI) that influence the number of valid ISO 9001 and ISO 14001 certifications. The Knowledge Discovery in Databases (KDD) approach was used to identify relevant indicators, with correlation analysis performed to validate the data. Our investigation shows influences that previous studies had not found: the number of certifications and scientific articles, passenger transport by railways and air, greenhouse gases, and methane and nitrous oxide emissions.
... Sameness-cum-variation across organisations indicates that the way in which glocalised forms of responsibilities are created necessarily depends on the degree of the orientation of an organisation toward the global or away from it (Walgenbach et al., 2017). Responsible actorhood on the formal dimension is exposed by the extent of the adoption of globally diffusing formal templates (Berliner & Prakash, 2013;Boli, 2006;Chen & Bouvain, 2009;Lim & Tsutsui, 2012;Pope, 2015;Shanahan & Khagram, 2006), which tends to increase similarity on the formal dimension across organisations in different local fields (DiMaggio & Powell, 1983;Drori et al., 2014a). These templates include the adoption of environmental (Berliner & Prakash, 2013) or accounting standards (Chen & Bouvain, 2009;Lim, 2016), membership in frameworks such as the United Nations Global Compact (UNGC; Lim & Tsutsui, 2012;Pope, 2015), or the adoption of specific organisational structures promoting responsible behaviour (Bondy et al., 2012;Matten & Moon, 2008). ...
... Responsible actorhood on the formal dimension is exposed by the extent of the adoption of globally diffusing formal templates (Berliner & Prakash, 2013;Boli, 2006;Chen & Bouvain, 2009;Lim & Tsutsui, 2012;Pope, 2015;Shanahan & Khagram, 2006), which tends to increase similarity on the formal dimension across organisations in different local fields (DiMaggio & Powell, 1983;Drori et al., 2014a). These templates include the adoption of environmental (Berliner & Prakash, 2013) or accounting standards (Chen & Bouvain, 2009;Lim, 2016), membership in frameworks such as the United Nations Global Compact (UNGC; Lim & Tsutsui, 2012;Pope, 2015), or the adoption of specific organisational structures promoting responsible behaviour (Bondy et al., 2012;Matten & Moon, 2008). ...
... On the local institutional level, variation was related to the propensity of political authority to supervise organisations (Lim & Tsutsui, 2012), the existence of specific communicative frames in local discourses (Boyle et al., 2015), or the existence of regulations regarding responsibility (Gjølberg, 2009;Lim, 2016). On the organisational level, differences were seen as grounded in the factual conditions of the organisation, for example, size and industry (Berliner & Prakash, 2013;Chen & Bouvain, 2009;Delmas & Montes-Sancho, 2011;Vidal et al., 2015). Indeed, the global idea of responsibility is the source of a multitude of formal templates that spread globally, that is, across local fields (multiple diffusion; Pope & Meyer, 2016). ...
In this study we employ the glocalisation perspective in institutional theory to investigate the simultaneous existence of similarity and variation across organisations in world society. By focusing on responsibilities that organisations display, we analyse both global and local orientations of large publicly listed corporations. We first investigate whether the adoption of globally diffusing formal templates (such as ISO 14001, the United Nations Global Compact) is accompanied by a lower degree of variation in organisations' orientation in a supralocal field. Second, we investigate the relationship between the corporations' local origin and the variations in the adopted orientation regarding the responsibilities that they display. We apply natural language processing methods to analyse the self-representations of large corporations from Germany, the United Kingdom, and the United States. Our findings indicate that a high extent of the adoption of globally diffusing formal templates corresponds with a lower degree of variation across organisations. However, we also find that the respective local origin of organisations explains the remaining variation and the patterns of variation regarding the responsibilities that the corporations display.
... This "California effect" has been particularly evident in studies of ISO 14001 adoption, 5 beginning with Prakash and Potoski (2006), who found that countries are more likely to adopt ISO 14001 when their major trade partners have large numbers of ISO 14001 certified facilities. 6 Subsequent studies by Marcoux and Urpelainen (2012) and Berliner and Prakash (2013) provided nuance to this finding by demonstrating that the trade-based diffusion of ISO 14001 is contingent on exporter countries' existing adoption levels and strength of regulatory governance. ...
... In both variables, the trade data were drawn from the International Monetary Fund (IMF) Direction of Trade Statistics (DOTS) (International Monetary Fund 2014), while ISO 14001 data were provided by Berliner and Prakash (2013). ...
... At the firm level, research has highlighted the roles of resources (Baek 2017), previous experience with VEPs (Delmas and Montiel 2008), signaling efforts (Bansal and Hunter 2003), and perceived costs and benefits (Kollman and Prakash 2002). 18 At the domestic level, factors include pressures from government (Roht-Arriaza 1997; Delmas and Montiel 2008) and civil society (Neumayer and Perkins 2004;Delmas and Montiel 2008), as well as corruption (Berliner and Prakash 2013) and income (Neumayer and Perkins 2004). At the international level, studies have highlighted foreign investment (Prakash and Potoski 2007;Zeng and Eastin 2012), as well as membership in intergovernmental organizations and the presence of international nongovernment organizations Potoski 2006, 2007;Zeng and Eastin 2012). ...
Scholars have consistently found that firms in developing countries adopt voluntary environmental programs (VEPs) in high numbers when their major trade partners are home to many VEP-certified firms. This reflects the following dynamic: Importers based in countries with many VEP-certified facilities demand similarly sustainable production processes from trade partners, and so exporting firms in partner countries adopt VEPs to signal their sustainable practices. Studies have identified characteristics of developing countries that make local exporting firms more likely to adopt VEPs as a signal; however, there has been little analysis as to the country-level characteristics that make importers more (or less) likely to demand VEPs from suppliers abroad, beyond having many VEP-certified firms themselves. This study considers this matter, theorizing that VEP diffusion only accompanies exporting to countries with high levels of income and education, as well as a high number of VEP-certified firms. Panel data analysis provides support for the theory, showing that developing countries only experience trade-based diffusion of ISO 14001 (a widely adopted VEP) through their exports to countries with high income and/or education levels. In contrast, exporting to countries that lack these characteristics creates no such diffusion, even where importing countries’ VEP certification levels are high. Instead, such trade produces a “stuck in the mud” effect, as developing countries’ certification levels stagnate even as those of their import partners rise.
... On the other hand, scholars view the rise in the adoption of environmental self-regulatory tools as a shift from government to governance where non-state actors, such as corporations, increase their participation in regulatory actions (Albareda, 2008;Balleisen and Eisner, 2009;Hysing, 2009). In this context, state environmental regulation and voluntary self-regulation are conceptualized as adversaries or substitutes (Berliner and Prakash, 2013;De La Cuesta Gonzalez and Martinez, 2004;Gupta and Innes, 2014;Potoski and Prakash, 2013). ...
... In contrast, we would expect that direct instruments would have a negative effect on externally certified EMS as a number of recent studies (Berliner and Prakash, 2013;Prakash and Potoski, 2013) suggest that corporate voluntarism has evolved as a substitute for government intervention in the broader framework of neoliberal state policies. Accordingly, firms certify an in-house EMS externally in order to address the void created by the insufficiency of regulations and to signal their green credentials to stakeholders. ...
... However, recent studies argue that there may be little need to signal cleanness through formal certification under heavily regulated industrial settings where pollution levels are already closely measured, monitored, and controlled by the authorities. Berliner and Prakash (2013) and Prakash and Potoski (2013) state that EMS certification is used to generate a distinction via brand name recognition, which assures stakeholders that the firm is clean. When regulatory regimes are lax, firms tend to certify their EMS in order to differentiate themselves in the marketplace. ...
This article focuses on environmental management systems (EMS) and aims to enhance our understanding of the relationship between environmental state regulation and self-regulation. Unlike previous studies that treat state regulation as uni-dimensional and focus on externally certified forms of environmental self-regulation, this article takes a more nuanced approach. It looks at how direct and indirect state regulation and its stringency influence both non-certified in-house and externally certified adoption of EMS. Methodologically, the study differentiates from previous research by acknowledging the interconnected nature of in-house and external certification decisions, viewing these decisions as sequential. Based on a survey of 2076 UK firms, findings show that effective environmental protection entails collaboration between environmental state regulation and in-house adoption of EMS. Results also reveal that externally certified EMS substitute for state environmental regulation, filling the void that results from weakening state regulation in the context of neoliberalism.
... As a result of the shift in the corporate paradigm from the single P (profit) to the Triple P, several publicly traded companies have made green investments to attract potential shareholders (Profit, People, and Planet). A "green investment" (GI) is a company's attempt to address environmental issues by reducing the detrimental environmental effects of business operations while generating earnings (Berliner and Prakash 2013;Fernandes et al. 2021). Green investment should improve a company's value and competitiveness (Hung 2023). ...
... Green investment is a corporate approach to gaining and retaining credibility and support from stakeholders. By doing so, the corporation mitigates the negative impact of operating operations on the environment by lowering energy consumption and carbon emissions (Berliner and Prakash 2013;Ferreira et al. 2014). The firm's concern for the environment is highlighted in their annual report to demonstrate their environmental responsibility. ...
In light of the conflicting findings within the existing empirical literature regarding the factors influencing environmental, social, and governance (ESG) disclosures in the context of sustainable investment and firms’ green innovation performance (GIP), our current study stands out as a distinctive research endeavor that examines how the relationship is influenced by the moderating effects of sales growth. Non-financial trade manufacturing companies listed on the Shanghai and Shenzhen stock exchanges between 2015 and 2020 were selected for this study. For data estimation, panel regression estimations using OLS and fixed effects models have been used. The results demonstrate a significant moderation of manufacturing industry’s sales growth in China on the relationship between ESG disclosures and sustainable finance (operationalized by green credit, and green investment), and green innovation (operationalized by R&D intensity and green patents). Several practical takeaways are offered to boost green innovation performance among ESG reporting enterprises and increase the effectiveness of R&D intensity. These findings, including policy recommendations, will benefit all stakeholders.
... Adopting private regulations (such as the ISO-14001) has been argued as an important manifestation of environmental stewardship, as the adoption of such voluntary standards signals a firm's commitment to environmental performance beyond legal requirements (Potoski & Prakash, 2013). Obtaining and maintaining the ISO-14001 certification requires a firm to setup an environmental management system, to make substantial investment in training its personnel to maintain the system, and to accredit the system from third-party auditors (Berliner & Prakash, 2013). The obligations of ISO-14001 are continual, and firms are expected to analyze their current position regarding pollution and waste management and establish a policy to reduce them using practices in day-to-day implementation (Iatridis & Kesidou, 2018). ...
... As such firms lead regional or global value chains, they often (coercively) require their suppliers to 'harmonize' various management systems, such as production and accounting systems, with their own systems. In this context, requiring suppliers to adopt ISO-14001 to harmonize their environmental management system with theirs is considered a normal practice (Berliner & Prakash, 2013, Christmann & Taylor, 2001, Iatridis & Kesidou, 2018, Jiang & Bansal, 2003, Sims, 1999. Such coercive pressures cause suppliers in GVCs to enhance their responsible operational actions to maintain their legitimacy in the GVC setting (Sinkovics, Sinkovics, & Archie-Acheampong, 2021a). ...
Multinational enterprises operating global value chains are being increasingly pressured to source from suppliers that adopt green private standards. Likewise, public policymakers are also pressured to reduce national pollution levels to contribute to sustainable development initiatives. In this context, while there is extensive debate on how domestic, country-specific environmental regulations interact with private standards (adopted by firms) in reducing national pollution levels, less is known about the role of international trade policies, which have recently embraced an array of sustainability issues. Our paper seeks to extend our understanding of the extent to which ISO environmental certifications affect a country’s level of emissions of greenhouse gases and air pollutants, and whether the European Union’s environmental protection (EP) standards – as mediated through trade agreements – condition this response. Prior research provides mixed evidence on the impact of the adoption of ISO-14001 on pollution reduction. Based on prior literature and using institutional theory and environmental stewardship perspectives, we expect that membership of trade agreements with EP provisions would complement the effect of ISO-14001 uptakes in reducing national pollution levels. Our arguments and results emphasize the complexity between private and public regulations on pollution reduction.
... Within the cross country diffusion literature, another stream examines ISO 14001 adoption behavior of developing country firms in the context of debates on globalization and global economic integration (e.g., Prakash and Potoski, 2006;Prakash and Potoski, 2007;Berliner and Prakash, 2013;Berliner and Prakash, 2014). While this literature is not necessarily focused on developing countries explicitly, their findings have significant implications for understanding ISO 14001 adoption behavior among developing country firms. ...
... Empirical literature in developing countries consistently provides support for this hypothesis. In addition, there is evidence that not only export-orientation but also the country to which firms predominantly export may also determine the ISO 14001 adoption decision (e.g., Berliner and Prakash, 2013). In particular, past studies argue that countries that widely adopt ISO 14001 are more likely to mandate those standards for exporting firms. ...
Voluntary environmental initiatives (VEIs) by firms are often viewed as important for environmental management in developing countries such as India with weak regulatory institutions and poor enforcement of environmental laws. Past research shows that while VEIs may not be able to fully substitute for strong regulation, they could be useful complements to reduce environmental degradation in developing countries. In India, new government initiatives such as "Make in India" are geared towards significantly increasing the manufacturing output in the next few years. In this context, our paper studies the adoption of a widely employed VEI-the ISO 14001 standards certification-among the Indian manufacturing industries. Using the theoretical framework of Earnhart, Khanna, and Lyon (2014) on the drivers of corporate environmental strategies in emerging economies, we hypothesize that the likelihood of adoption of ISO 14001 standards among Indian manufacturing industries is a function of internal firm characteristics, input and output market pressures, and regulatory pressure. We test our hypotheses using a survey of 1000 (large, medium, and small) manufacturing firms across the country, conducted under the aegis of the World Bank in 2016. Results show that internal firm characteristics such as large size and firm innovation have a positive association with the likelihood of adopting ISO 14001 standards. Output market pressures, such as exporting to foreign markets, also positively impact the likelihood of obtaining ISO 14001 certification. In particular, exporting to China, which is ranked first in the number of ISO 14001 adoptions, has a statistically significant impact on probability of adoption. There is no evidence, however, that predominantly consumer-facing firms, another potential indicator of output market pressure, are more likely to adopt ISO 14001 standards. We also find state-fixed effects, potentially capturing the variation in both formal and informal regulatory pressure across states. Thus, consistent with other research in developing countries, we find that pressure to meet the environmental standards of countries to which firms in developing countries export their products acts as a strong incentive to adopt VEIs such as ISO 14001 standards. The lack of evidence that consumer-facing firms are no more likely to adopt ISO 14001 standards potentially indicate that firms in India do not yet find the green consumer markets large enough to adopt VEIs.
... According to Berliner and Prakash (2013) countries adopted ISO 14001 when customers and stakeholders overseas recognized this approach and internally environmental regulations were poorly enforced. According to Goedhuys and Sleuwaegen (2016) EMS matters more to firms that export. ...
... Financial benefit Quazi et al. (2001), Fryxell and Szeto (2002), Pan (2003), Zutshi and Sohal (2004), Schylander and Martinuzzi (2007), Salomone (2008), Djekic et al. (2014), Singh et al. (2015). Integration ISO management standards No source found Other Heras-Saizarbitoria (2011), Qi et al. (2012), Matela (2006), Orbegozo et al. (2012),Chung et al. (2005),Bansal and Hunter (2003),Berliner and Prakash (2013),Goedhuys and Sleuwaegen (2016),Potoski and Prakash (2004),Prakash and Potoski (2006),Mohamed, (2001),Nishitani (2010),To and Lee (2014). ...
The purpose of this paper is to study potential association between international trade and ISO 14001 certification. The study is based upon a search conducted by International Organization for Standardization (ISO) performed in 2013, which includes responses from 110 countries in 11 languages. At this time, among all topics from the research, the variables studied were motivations for implementation and the benefits achieved. These data were crossed with features of international business trade to identify its real outcome. The null hypothesis to be tested is that there was no correlation or association between international trade and the studied variables. Results show that there were 16 weak correlations between motivations to implement ISO 14001 and international trade. The survey result shows that there are weak correlations among countries international trade and motives to get certification. Because the degrees of correlation are low, there is reason to further studies, what could probably include multivariate techniques. Anyway, the study suggests that some of the expected results and benefits for the business were not achieved or were achieved at degrees lower than expected in countries where trade is higher. Regarding motivations to implement the survey confirmed that attending to customers’ and stakeholders’ interests is an important driver for companies that export.
... Regarding the first condition, the literature shows that the reputation of the host country has an independent effect on business decisions (Dukerich and Carter 2000;Garriga 2016; van Ham 2001), and that companies' reputations affect their profit and the value of their shares. A good environmental reputation may benefit the relations of companies with their consumers-in terms of attraction and brand loyalty-and also with their shareholders, investors and lenders who factor environmental factors in their decisions (Berliner and Prakash 2013;Jain and Prakash 2017;Zeng and Eastin 2007). Reputational gains of subsidiaries may not only improve the company's standing in local communities (Reinhardt 1998, 44), but also work as a "buffer against the parent firm reputation risk" (Zhou and Wang 2020). ...
... Regarding the first condition, the literature shows that the reputation of the host country has an independent effect on business decisions (Dukerich and Carter 2000;Garriga 2016; van Ham 2001), and that companies' reputations affect their profit and the value of their shares. A good environmental reputation may benefit the relations of companies with their consumers -in terms of attraction and brand loyalty -and also with their shareholders, investors and lenders who factor environmental factors in their decisions (Berliner and Prakash 2013;Jain and Prakash 2017;Zeng and Eastin 2007). Reputational gains of subsidiaries may not only improve the company's standing in local communities (Reinhardt 1998, 44), but also work as a "buffer against the parent firm reputation risk" (Zhou and Wang 2020). ...
Despite the coexistence of three trends – increased economic integration, a dramatic reduction in biodiversity, and the implementation of national policies to reduce extinction risks – we know little about how foreign investment affects biodiversity. This paper focuses on the incentives that foreign direct investment (FDI) poses on governments’ foremost strategy to protect biodiversity: the establishment of protected areas. Protected areas have expanded in most countries at rates that are not explained merely by geography or environmental reasons. We argue that FDI is associated with the expansion of protected areas through two channels. First, multinational corporations can obtain reputational benefits from host countries’ commitment to protect biodiversity. Second, protected areas impose different costs on existing and prospective FDI, and rarely entail expropriation of foreign investment. This potentially shields foreign owned firms from domestic or international competition for the use of comparable resources. Statistical analyses on a sample of 60 developed and developing countries between 1984 and 2020 strongly support our expectations. Our findings shed new light on globalization’s non-economic implications and adds to our understanding about how international factors influence the provision of public goods.
... Apart from global standards, the presence of voluntary sustainability standards (VSSs) is also observed, which are present in different industry sectors and countries. MNEs, including EMNEs, are motivated to adopt sectoral VSS when they operate in host countries with poor regulatory governance (Berliner and Prakash, 2013). Analysis of 232 VSSs deployed in 15 industries and 180 countries has revealed that VSSs do not align uniformly with the SDGs, and several SDG targets cannot be mapped to these voluntary standards (Bissinger et al., 2021). ...
Purpose – This paper aims to present an approach for business organizations, especially multinational enterprises (MNEs), to pivot their focus from the United Nations' sustainable development goals (UN SDGs) to simple doable goals (SDoGs) so that the probability of impactful and sustainable outcomes increases significantly.
Design/methodology/approach – Through multilevel analyses, the paper identifies the current challenges in the firm-level implementation of the SDGs. Consequently, it synthesizes an integrated solution that can help MNEs create sustainable business models, contributing to realizing the SDGs.
Findings – The sporadic and chaotic adoption of SDGs and ambiguous outcomes reported by businesses are due to the following: SDG adoption choices are driven by the materiality effect; the differences between the UN-defined government targets and business-level targets, often chosen by businesses on their own, make an aggregation of performances infeasible; lack of validation of the firm-level reporting leads to “greenwashing”; focusing less on business model transformation and more on reporting hinders the achievement of true sustainability; and lack of coordination and integration in actionizing among stakeholders limits the holistic
change that the SDGs are expected to bring to society. Based on the Prêt-a-faire – Gestalt matrix, the proposed framework shifts the organization’s focus to the fundamental aspects of the purpose, strategy and business sustainability, and demonstrates how the resultant SDoGs effectively contribute to the realization of the SDGs. The matrix in the framework classifies an MNE based on its overall organizational readiness to seize business opportunities and helps pursue a course of action toward true sustainability.
Originality/value – The guidelines from the proposed framework offer different strategic paths for the MNE to achieve parity, temporary advantage, and, finally, sustained competitive advantage. This transformative approach enables businesses to develop their roadmaps for achieving business sustainability and supporting the realization of the SDGs.
Keywords: SDGs, Sustainable business model, Multinational enterprises, Prêt-a-faire – Gestalt matrix
... Additionally, it is seen as a corporate strategy that aims at maintaining legitimacy and supporting stakeholders. In this way, companies reduce the adverse environmental impacts of operational activities by reducing energy consumption and minimizing CO 2 [16,27,28]. Based on research carried out by Palma-Ruiz et al. [29], GI is regarded as an appropriate strategy for enhancing competitive advantages and improving a company's reputation among stakeholders. ...
Hotels in today’s business environment are no longer solely concerned with profit, but
rather with profit, people, and the planet (3Ps). In corporate terms, green investment (GI) is regarded
as a strategy that aims for maximum profit with minimal environmental impact. As a result, the
current study primarily aims to empirically investigate the impact of internal and external drivers on
GI adoption in Saudi Arabian eco-friendly hotels. Additionally, it explores to what extent GI affects
eco-friendly hotels’ environmental, economic, and social performance. To achieve these objectives, a
web-based questionnaire was developed and addressed to the senior manager/director in charge of
environmental management in all four- and five-star eco-friendly hotels in Saudi Arabia. The total
number of certified eco-friendly hotels in all regions of Saudi Arabia was 403. Only 298 forms were
received and were valid for statistical analysis. A structural equation modeling (SEM) technique
with maximum likelihood estimation was employed to test the study hypotheses. The findings of
this study illustrate that GI is significantly positively affected by external as well as internal drivers.
Adaptation to/mitigation of climate change was the highest perceived driver. Additionally, GI has a
significant positive contribution to enhancing hotels’ environmental performance, increasing economic
performance, and boosting social performance. Based on the study findings, eco-friendly hotel
operators should consider GI in their strategic plans, as a corporate strategy aiming at maximizing
profit and enhancing the quality of social life without harming the environment.
... Additionally, it is seen as a corporate strategy that aims at maintaining legitimacy and supporting stakeholders. In this way, companies reduce the adverse environmental impacts of operational activities by reducing energy consumption and minimizing CO 2 [16,27,28]. Based on research carried out by Palma-Ruiz et al. [29], GI is regarded as an appropriate strategy for enhancing competitive advantages and improving a company's reputation among stakeholders. ...
Hotels in today’s business environment are no longer solely concerned with profit, but rather with profit, people, and the planet (3Ps). In corporate terms, green investment (GI) is regarded as a strategy that aims for maximum profit with minimal environmental impact. As a result, the current study primarily aims to empirically investigate the impact of internal and external drivers on GI adoption in Saudi Arabian eco-friendly hotels. Additionally, it explores to what extent GI affects eco-friendly hotels’ environmental, economic, and social performance. To achieve these objectives, a web-based questionnaire was developed and addressed to the senior manager/director in charge of environmental management in all four- and five-star eco-friendly hotels in Saudi Arabia. The total number of certified eco-friendly hotels in all regions of Saudi Arabia was 403. Only 298 forms were received and were valid for statistical analysis. A structural equation modeling (SEM) technique with maximum likelihood estimation was employed to test the study hypotheses. The findings of this study illustrate that GI is significantly positively affected by external as well as internal drivers. Adaptation to/mitigation of climate change was the highest perceived driver. Additionally, GI has a significant positive contribution to enhancing hotels’ environmental performance, increasing economic performance, and boosting social performance. Based on the study findings, eco-friendly hotel operators should consider GI in their strategic plans, as a corporate strategy aiming at maximizing profit and enhancing the quality of social life without harming the environment.
... The diffusion process is also affected by a sectoral-specific condition . There is a body of literature related to the role of infrastructural and institutional quality and their role in the diffusion of diffusion (Berliner & Prakash, 2013;Orcos et al., 2018) Based on the literature, we develop a conceptual framework to explain the diffusion of ISO-50001 certification at the country level. ...
This study examines the uneven spread of ISO-50001 standards at the country level with sample size of ninety-six (96) countries from 2011-2019. For the empirical estimation, we applied probit regression to analyse the reach of the certification across countries, and the negative binomial regression to analyse the intensity of diffusion. The findings show that infrastructural and institutional quality facilitate the ISO standard’s diffusion. Countries with more developed energy sectors are more than expected to have a greater level of energy management certification. Furthermore, the diffusion of the certification is strongly affected by the geographic location of a country. The number of ISO-50001 certificates in a country is linked to the intensity of the certification in the neighbouring countries. We also found the neighbourhood effect measured in terms of distance-weighted corticates in other countries as a strong predictor of the diffusion process.
... Finally, certification in standards has been considered to be sensitive to the general level of regulatory governance and corruption in a society (e.g., Montiel et al., 2012;Berliner and Prakash, 2013), thus, we gathered a country-level corruption measure from Transparency International to control for such effects (hereafter referred to as Country-Corruption). For all the variables above, Table 3 provides short definitions and descriptive statistics, while Table 4 reports pairwise correlation coefficients for all variable constructs based on the estimation sample. ...
The literature on quality-management standards has generally focused on the drivers, motivations, and performance effects of adopting such standards. Yet the last decade has witnessed a substantial degree of decertification behavior, as organizations have increasingly decided to voluntarily withdraw from quality-management standards by not recertifying. While the drivers of the decision to initially adopt quality-management standards have been extensively studied, the drivers of the decision to decertify have received scant scholarly attention. We argue that innovative organizations are generally prone to retaining quality-management certification and thus exhibit a tendency to not abandon certification; however, radically-innovative organizations are more prone than incrementally-innovative organizations to discontinue quality-management standards and thereby exhibit a tendency to withdraw from quality certification. We compile World Bank data surveying facilities based in 50 countries and 103 industrial sectors across the 2003 to 2017 period. Taking advantage of the data's panel properties yields a dataset composed of up to 1755 facility-level observations of recertification decisions for empirical analysis. Our empirical testing employs a probit estimation technique that accounts for the appropriate fixed effects and generates results that support our theoretical priors regarding decertification behavior.
... It seeks to establish good relations between the company and the surrounding environment to improve its sustainability performance. The company's sustainable performance can be improved by green investment activities [33,35,52,62,63], CSR investment [13,31,34,64]. H2: The adoption of green accounting can enhance sustainable performance. ...
This study aims to introduce ihsan value to the style of entrepreneurship in e-business, namely ihsan digipreneurship. In running an entrepreneurial business in this digital era, it is necessary the spirit of religiosity and religious identity as a solution to create an image and gain public trust. For this reason, the application of religious values for entrepreneurs in carrying out their business is very important because they can affect the survival of the business. Entrepreneurs who apply the religious values of honesty, trustworthiness, and hard work can reflect entrepreneurial values and always instill kindness.KeywordsEntrepreneurship orientationReligious valueDigital entrepreneurshipIhsan digipreneurship
... It seeks to establish good relations between the company and the surrounding environment to improve its sustainability performance. The company's sustainable performance can be improved by green investment activities [33,35,52,62,63], CSR investment [13,31,34,64]. H2: The adoption of green accounting can enhance sustainable performance. ...
Small and medium enterprises (SMEs) play a strategic role in contributing to the environment, society, and surrounding communities. One of the SMEs is from the batik industry, identified by the Ministry of Environment as one of Indonesia’s worst causes of river pollution. Excessive water, dye materials, and kerosene stoves cause environmental pollution. Several studies reveal that the batik industry produces quite high CO2 emissions. If batik entrepreneurs do not immediately realize it, it has the potential to lower performance and environmental sustainability; thus, green accounting is expected to affect sustainable performance. This study examines green accounting on sustainable performance with financial performance as an intervening variable involving batik SMEs in Central Java, Indonesia. This research contributes to the literature on green accounting practices by looking at how SMEs in Central Java of Indonesia take their social roles thoughtfully.KeywordsGreen accountingFinancial performanceSustainable performanceCentral Java SMEs
... Despite the debate on the linkage between corruption and firm performance, scholars generally agree that rent-seeking behaviours are harmful to environmental control practices of businesses. There is handsome evidence that in a weak institutional context where corruption is rampant, it is popular for businesses to resort to bribery instead of obeying environmental regulations (Berliner and Prakash 2013;Desai 1998;Pellegrini and Gerlagh 2006;Smith et al. 2003). For this reason, many scholars highlight the role of private certification in overcoming information asymmetries in corrupt regimes (Montiel et al. 2012). ...
In this dissertation, both globalization forces and internal sociopolitical aspects are analyzed to examine how these factors affect growth and environmental quality in various countries, with a closer focus on developing economies and then Vietnamese small and medium-sized enterprises (SMEs). So far, there are few works attempting to address sustainability in a holistic approach of both outside and inside contexts. The research aims to provide a comprehensive discussion on how a country should match its integration level and its governance quality to achieve sustainable development.
The three empirical studies are presented in three main chapters of this dissertation, from Chapter 2 to Chapter 4.
Chapter 2 - An empirical investigation of the Environmental Kuznets Curve (EKC) from an international economics perspective: trade, FDI and the origin factor of FDI. This study tests the EKC hypothesis and studying the environmental impacts of FDI (from developed and developing partners) and trade, the two important physical aspects of globalization. Furthermore, the country-of-origin factor of FDI, which is largely ignored in the literature, is proved to be important to understand the impact of international investment on the environment.
Chapter 3 - Interaction between FDI and domestic factors in terms of their environmental impacts in developing countries. Utilizing the Environmental Kuznets Curve (EKC) model, this chapter examines the environmental impacts of institutional variables in their relationships with foreign direct investment (FDI) in 23 developing countries. All six elements of government indicators are tested while controlling their interaction terms with the two types of FDI, which originate from developed and developing regions. There are two important findings. First, FDI is proven to be an important channel to deliver the environmental effects of institutional qualities. Second, the FDI origin factor is critical to the nature of this interactive connection.
Chapter 4 - Export propensity, informal payment, politician ties and the Environment Standard Certificates (ESCs) of Vietnamese SMEs: Using firm-level data from a survey of more than 2600 Vietnamese SMEs, the last study finds empirical evidence of how export and corruption affect firms’ attitude toward environmental protection. The study emphasizes the need for better corruption control to make pollution control certification reflect the real environmental protection attitude of firms.
All in all, in the globalization era, when market forces greatly connect economies and drive firms behaviours, the role of environmental leadership at both national and international levels has become an essential element of the sustainable development. From that, a discussion on how governments and businesses should embrace globalization through a sustainable path is elaborated.
... Finally, certification in standards has been considered to be sensitive to the general level of regulatory governance and corruption in a society (e.g., Montiel et al., 2012;Berliner and Prakash, 2013), thus, we gathered a country-level corruption measure from Transparency International to control for such effects (hereafter referred to as Country-Corruption). For all the variables above, Table 3 provides short definitions and descriptive statistics, while Table 4 reports pairwise correlation coefficients for all variable constructs based on the estimation sample. ...
... A company's strategy to focus on green investment is to gain and maintain stakeholders' acceptance and support. In this way, a company manages the negative environmental impacts of its operations by reducing energy consumption and carbon emissions [19,20]; • Green economy sectors, i.e., such production that is environmentally friendly, commonly associated with agriculture, forestry, and animal husbandry, but also and primarily related to renewable energy and its widespread use in global economies; • Green public procurement [21], i.e., a policy under which public entities integrate ecological criteria and/or requirements into the purchasing process (public procurement procedures) and look for solutions that minimize the negative impact of products/services on the environment and take into account the entire life cycle of the products; by doing so, they influence the development and dissemination of environmental technologies [22]. The aim of green public procurement is to integrate environmental considerations into tender procedures, which is reflected in the ten-der criteria; in particular, it draws attention to their quality, functionality, technical parameters, and the use of the best technologies in terms of environmental impact [23]; • Green jobs, which are created as part of projects aimed at reducing the environmental pressure of the economy and consumption, are created in every sector of the economy and the only condition they must meet is to prevent harmful effects on the environment [24]; green jobs are directly related to the concept of sustainable development, i.e., economic growth associated with environmental protection and respect for human dignity-people become the subjects of such development, and the level of environmental degradation depends on their activity in terms of using natural resources in a sustainable way [25]. ...
The aim of the research, the results of which are used in this publication, was to identify the motives for mergers and acquisitions in the energy sector after the introduction of green economy elements in Western Europe. The mentioned region is the group of countries where changes related to the move to green energy are most visible (in addition to some countries from other regions, such as Singapore, New Zealand, or countries of the Arabian Peninsula). The research assumed the hypothesis that over the years since the Paris Conference the themes of mergers and acquisitions have changed from motives close to the views related to energy generation in traditional systems (black energy in large, monopolistic systems) to motives close to green energy (the research hypothesis). This was confirmed in the research, as business risk diversification (defined as diversification of the power sources from black to green) was the most popular M&A motive. In addition to emphasizing the direction of changes in the M&A motives, the authors of this study decided to check whether since 2015 (when the Paris Conference was organized) the motives behind the M&A transactions conducted by companies operating in the electrical energy generation sector have changed, making their motives close to the green energy dominant in Western Europe. Apart from verification of the abovementioned hypothesis, the aim of the research was to check whether there are any characteristic directions of changes in M&A motives across companies from particular Western European countries. The motives are changing from positional approaches to motives closer to resource approaches (green economy). The research used a critical analysis of the literature on the subject, a study that used desk research based on openly available sources and our own analytical tool developed for the needs of this analysis, which is the transformation of the concept of analysis of the M&A motives proposed in K. Borowski’s research: “The strategic development of the technology companies. The mergers and acquisitions perspective”.
... Because of the shift in the business paradigm from single P (profit) to Triple P (Profit, People and Planet) to entice potential shareholders, a number of publicly traded corporations have undertaken green investments. Green investment (GI) is described as a company's attempts to manage environmental challenges by lowering the negative impact of commercial operations on the environment while increasing sales (Berliner & Prakash, 2013;Ferreira et al., 2014). Green investment is thought to boost a company's competitive edge, reputation, and value (Bonifant et al., 1995). ...
Environmental concerns have got supreme interest from the researchers and policy makers for which experts have revealed their organizational impacts too. At the same time, corporate social responsibility is observed as a key determinant of financial performance both in developed and developing economies. Recognize the same, this study aims to examine the impact of corporate social responsibilities, economic innovation, green credit, and green investment on the sales growth of manufacturing industries of China and Saudi Arabia. This study has selected top twelve trading manufacturing companies registered in the Shanghai stock exchange and Saudi stock exchange during the period of 2016 to 2020. For data estimation, panel regression estimations like fixed and random effect models have been used. The results indicate that corporate social responsibility, economic innovation, green credit, and green investment are significantly and positively associated with sales growth of manufacturing industries in China and Saudi Arabia. However, their coefficient’s magnitude varies due to distinct features of both countries. These findings offer valuable policy recommendations for all stakeholders.
... 2014; To and Lee, 2014;Berliner and Prakash, 2013;Delmas and Montiel, 2008;Prakash and Potoski, 2007;Massoud et al., 2010); relation between ISO 14001 systems and other environmental management systems as well as systems for management in other areas like quality, safety (Testa et al., 2014;Granly and Welo, 2014;Neugebauer, 2012;Low Sui and Tan, 2005;Heras and Arana, 2010); enhancement of environmental management systems in line with ISO 14001 and its impact on their efficiency and effectiveness (Matuszak-Flejszman, 2010); evaluation of environmental audit quality (Prajogo et al., 2016;Heras-Saizabitoria et al., 2013); comparing the outcomes of environmental and financial operations of businesses which have implemented ISO 14001 EMSs and those which have not done it (Zobel, 2013;Naudé et al., 2011;Gomez and Rodriguez, 2011); application of environmental indicators (Comoglio and Botta, 2012); analysis of the human factor significance (commitment of employees, executives, the role of the person responsible for the system) for the efficiency of management in conformity with ISO 14001 (Rodríguezet al., 2011;Perez et al., 2009). The limited number of studies which concerned the analysis of environmental impact of system implementation were devoted to the assessment of the relation between the above and the attributes such as the size of the organisation, its ownership (private/public), sector (manufacturing/ service), stability/changeability of the applied technologies, amount of time for which the system has been in operation in a given organisation, possession of quality management system in conformity with ISO 9001, or finally, the extrinsic/intrinsic motivation for the system implementation (Matuszak-Flejszman, 2010;Prajogo et al., 2012;Boiral and Henri, 2012;Christmann and Taylor, 2006;Fura, 2013;Castka and Prajogo, 2013;Gavronski et al., 2013). ...
... businesses, environmental or industry organizations, multinational corporations) define norms, rules or standards that other like-minded actors adopt (Green, 2014). Such arrangements often emerge when government authority is diminished, lagging or lacking (Berliner & Prakash, 2013;Cashore et al., 2004), and private governance schemes can be applied to certain environmental problems since companies can rapidly adapt their practices in response to incentives, independent of national legislation (Österblom et al., 2015). Companies that participate in such private (or "market-based") programmes do so voluntary and often as a means of enhancing brand reputation (Potoski & Prakash, 2005;Thorlakson, 2018;, gaining a price advantage over competitors (Roheim et al., 2011) or addressing demands of import markets or other supply chain members . ...
Tuna support some of the world's largest, most valuable and spatially extensive fisheries, but effective management has been challenging due to their transboundary movements and the need for multilateral decision‐making. To address public concerns of over‐exploitation, fishing companies have sought to differentiate themselves through involvement in “sustainable seafood” eco‐certification programmes. Here, we show that the volume associated with such initiatives for tuna increased 237‐fold between 2007 and 2019. Today, 2.31 million tonnes (47%) of the global tuna catch comes from fisheries holding or seeking Marine Stewardship Council eco‐certification. This is due to a 57‐fold increase in the number of fisheries engaged in the eco‐certification process. Crucially, this growth is also correlated with a concurrent 14‐fold increase in the adoption of harvest strategies by Regional Fisheries Management Organizations (RFMOs). Semi‐structured interviews with a broad range of RFMO stakeholders corroborate that the rapid uptake of harvest strategies is largely attributable to pressure from fishing companies needing to meet eco‐certification requirements; over 90% of respondents had directly observed or speculated on this type of advocacy. These results suggest the tuna fishing industry and associated seafood supply chain actors are now playing an unprecedented role in shaping the international governance of these species.
... The extent of regulatory capacity and stringency of a firm's country of origin is likely to hasten the efforts that corporate executives dedicate to environmental sustainability, as a channel to signal to regulators the firm's ability to reduce its negative impacts on the environment. Managers will readily heed to regulatory pressures-from both existing and impending regulation-in an attempt to earn goodwill with regulators to avoid complex, inflexible, and costly regulatory processes and legal liabilities (Berliner & Prakash, 2013;Cashore et al., 2004;Darnall, Potoski, & Prakash, 2010;Khanna, Deltas, & Harrington, 2009;Khanna, Koss, Jones, & Ervin, 2007). That being said, companies facing similar regulatory environments may not always respond in the same way. ...
... • Keywords: agri-environmental scheme, incentive schemes, environmental stewardship schemes, certification, Forest Stewardship Council (FSC), Marine Stewardship Council (MSC), regulation, law, policies • Examples: "We focus on ISO (International Organization for Standardization) 14001, the most widely adopted voluntary environmental program in the world" (Berliner & Prakash, 2013); "this study examines how landowner assistance programs (which may include management plans, costshare, technical assistance and advice, and education components) affect family forest owner behavior" (Andrejczyk et al., 2016). ...
Current sustainability challenges-including biodiversity loss, pollution and land-use change-require new ways of understanding, acting in and caring for the landscapes we live in. The concept of stewardship is increasingly used in research, policy and practice to articulate and describe responses to these challenges. However, there are multiple meanings and framings of stewardship across this wide user base that reflect different disciplinary purposes, assumptions and expertise, as well as a long history of use in both academic and lay contexts. Stewardship may therefore be considered a 'boundary object'; that is, a conceptual tool that enables collaboration and dialogue between different actors whilst allowing for differences in use and perception. This paper seeks to map out the multiple meanings of stewardship in the literature and help researchers and practitioners to navigate the challenges and opportunities that come with using the term. We provide the first qualitative systematic review of stewardship, and identify four distinct meanings of the concept in the literature: Ethic, Motivation, Action and Outcome. We then develop a novel framework for thinking through and connecting these multiple meanings, centered around three dimensions: care, knowledge and agency. This framework is used to identify the care dimension and relational approaches as important areas for future stewardship research. In these efforts – and for scholars engaging with the stewardship concept more broadly – this paper can act as a helpful ‘centering device’, connecting practitioners, policy-makers and researchers from multiple disciplines in pursuit of sustainability.
... or both of these variables have been included in other analyses of trade-based diffusion (Prakash and Potoski 2006;Greenhill et al. 2009;Saikawa 2013). The data for these variables were drawn from Greenhill et al. (2009) in the models covering 1986-2002 and from Berliner and Prakash (2013) in the models covering the post-2002 period. 18 Several domestic-level variables have also been included in the model, in light of the important role that domestic institutions and characteristics are likely to play in the institutionalisation of labour laws. ...
Scholars have long debated whether trade leads to a ‘race to the bottom’ or to a ‘race to the top’ in the labour standards of developing countries. Recent literature has offered encouraging findings consistent with the latter theory: stringent labour laws diffuse from importing countries to their export partners in the developing world. This finding has advanced our understanding of trade and labour rights, but more fine-grained analysis can further clarify what sorts of bilateral trade partnerships generate diffusion. In particular, South–South trade appears not to be characterised by the competitive pressures and foreign policy norms that produce labour rights diffusion. As such, this study compares the diffusion effects of South–South trade to those of other types of trade, using data covering 104 developing countries from 1986 to 2011. Results demonstrate that South–South trade is not accompanied by diffusion of labour laws, in contrast to other types of trade. This finding has important implications: whereas empirical results in earlier work suggest that developing countries will experience labour rights betterment if they export intensively to partners with stringent labour standards, my findings clarify that this will not occur if those partners are countries of the Global South.
... This value gives us an indication about a propensity to participate in voluntary certification programs: the increase of the immaterial investments expenditure leads to a propensity to participate in voluntary certification programs. This participation may be viewed as a "brand name" that allows companies to show their commitments and to strengthen reputation [83]. For this reason, the result confirms the theory that there is a greater propensity to voluntarily certify for companies that invest in marketing. ...
Background:
The phenomenon of asymmetric information is central in the agri-food sector, in which often there is not full information transparency about product quality. This condition is particularly complex considering the high-end products. In particular, there are specific attributes (credence attributes) that are not assessable by consumers. For these reasons, a clear information about certification can give to consumers the possibility to make a rational choice. A company can choose voluntarily to participate in certification programs that can be viewed also as a simplification of some organization issues. Often the incentives to participate in voluntary programs arise from the need to have a positive economic performance of the firm. On the one hand, the firm may have benefits from the technical assistance of the certification, which allows it to reduce costs of controlling particular sensible steps of the process. On the other hand, the firm may provide a new certification label, in order to ensure a greater transparency of its processes.
Methods:
The research aims to understand the characteristics of firms oriented to use voluntary certifications as a tool to reduce information asymmetries between producers and final consumers. In particular, we want to consider two contexts of analysis: a structural one, considering some specific internal aspects and investment choices of the firms (typology, size, extraction system, storage system, material investments, immaterial investments); a second one that takes into account some decisions related to market relationships (sale to consumers, sale to HoReCa, sale to wholesalers, sale to purchasing groups, sale to GDO, export activity). The study concerns small and medium olive oil company of Southern Italy. We apply two logit models in order to show the determinants in the choice to introduce a voluntary certification.
Results:
The results show significant values in both the two dimensions considered. Among the first one, there are significances in immaterial company investments but also in physical assets related to the olive oil process. There are several scientific developments relevant to the olive oil process and some of these patents have been reviewed in this paper. Regarding the physical assets, the storage system is a clear representation of the asset importance in the decision to participate in the certification program. Furthermore, the presence of considerable immaterial investments is important in the certification decision, which confirms the idea that voluntary certification can be viewed as a strategic tool. In the second part of analysis there are significances in some distribution channels (direct sale to final consumer, to wholesalers and to purchasing groups) as well as in the export activity.
Conclusion:
This work aims to contribute to the debate about the addressing of quality policy for a reduction of asymmetric information in the high-end products. Because of small dimensions of firms in Southern Italy, not always we can find conditions about the presence of specific assets. Indeed, the small dimensions of the companies make quality investments complicated. The incentive to invest, both in terms of control of product and in terms of immaterial investment, can help in a participation in voluntary certification programs. Further, it is important to investigate the three distribution channels resulting from the research because of their importance in terms of information asymmetry.
... Many emerging and developing countries have an institutional framework characterized by weaker environmental regulatory, normative and cognitive pressures [55] compared with developed countries [56], which influences the way in which firms manage their resources [57] and the relations with their key stakeholders [11] according to institutional theory [58] From a regulatory perspective, governments promote laws, rules, norms and sanctions for firms to reduce their pollution emissions using pollution control technology and, thus, complying with legally established pollution thresholds [59]. Firms failing to carry out these environmental requirements are penalized, fined or may even lose their operating licenses [60] in developed countries [13], while the lack of resources to enforce environmental government regulations and monitor business activities in many developing and emerging countries [61,62] could mean that firms with low enforcement of environmental regulation [54], which produce environmental damage, have never been fined [63]. ...
The relationship between corporate environmental performance and corporate financial performance has been extensively studied in developed countries, and has received less attention in developing countries. For this reason, the main objective of this paper is to examine the effect of corporate environmental performance on corporate financial performance during a global financial crisis, depending on the economic development level of the country where a firm is located. To this end, we obtain data for a sample of 2982 large firms from 2008 to 2015. We apply Petersen’s approach to these data, adjusting the standard errors for clustering by both firm and year. The results obtained show that the adoption of environmental practices significantly and positively affects the corporate financial performance in developed and developing countries. However, this effect is stronger for firms located in developing countries than those located in developed countries.
... Also, through their SRC strategies they are appeasing government stakeholders who granted them the "missionary" status of being state modernisers post-Independence (Ozen and Küskü, 2009) and continue to hold considerable control over the corporate landscape post-liberalization. After India's liberalization (1991) FFs are also increasingly seeking access to foreign markets and capital and aggressively use environmental SRC to differentiate themselves from their weak home-country institutions and governance mechanisms (Berliner and Prakash, 2013). This study is not without limitations. ...
... IGOs and INGOs offer further insights as to sample countries' exposure to global networks and norms, which are likely conduits for diffusion (Busch & Jo¨rgens, 2005). Data for these variables were provided by Berliner and Prakash (2013). ...
A large scholarship surrounds the relationship between trade and the environment, with much of it centering on whether trade produces a race to the bottom or a race to the top in the environments of developing countries. While the effects of trade on key pollutants and on specific environmental policies have been widely attended to, scholars have not yet considered if and how trade impacts developing nations’ environmental performance, broadly speaking. This is a critical matter, as the effects of trade on the environment can only be appreciated fully through holistic assessment of the environment and environmental protection. The study that follows helps to fill this void through analysis of an all-inclusive measure of environmental performance that encompasses indicators of policy and practice. Findings demonstrate that exporting to the United States and the European Union improves environmental performance in developing countries; however, no such effect accompanies trade with other countries.
... Examples of such standards include: ISO 14001, the United Nations Global Compact, the Global Reporting Initiative, and the Forest Stewardship Council. Although these standards differ significantly in terms of how they function and what they aim to achieve -ranging from broad principles to stipulate organizational learning around responsible business (Rasche, 2012) to initiatives which certify and label organizations, products and services (Berliner & Prakash, 2013) -they jointly reflect what Waddock (2008) calls a 'new institutional infrastructure' for corporate sustainability and responsibility. Such standards have been subject of intense scholarly debate. ...
This chapter discusses the role of voluntary standards for corporate sustainability and responsibility as enablers of and impediments to sustainable consumption. We start by theoretically reflecting on the notion of standards, discussing different characteristics of this mode of regulation. Next we distinguish different types of standards for corporate sustainability and responsibility. Our subsequent analysis shows that standards enable sustainable consumption by (1) reducing information asymmetries, informing consumers about the social and environmental conditions under which products and services are created, (2) supporting the disclosure of firms’ sustainability-related information (potentially leading to increased consumer loyalty), and (3) further institutionalizing the discourse around sustainable consumption. However, our discussion also emphasizes that voluntary standards can impede sustainable consumption, because (1) the coexistence of a variety of competing initiatives in some sectors (e.g. fair trade coffee) is likely to confuse consumers, (2) consumers may question the credibility of selected standards, since highly public scandals have revealed the limits of auditing and monitoring practices, and (3) while many standards are designed as multi-stakeholder initiatives, only few of them directly involve consumer representatives, leaving the impression that some standards define practices for consumers but not with them.
... Second, we now have a clear sense of the types of VSR, their institutional design, and their relative prevalence (Esrock and Leichty 1998;Capriotti & Moreno 2007;Birth et al. 2008;Khanna and Brouhle 2009;Marx and Cuypers 2010;Lyon 2009). Third, research now identifies the sources of motivation for VSR -win-win opportunities, the specter of regulation, and the threat of sales loss (Bhattacharya et al. 2008;Berens et al. 2007;Berliner and Prakash 2013;Elkington 1998;Fombrun and Shanley 1990;Gunningham, Kagan and Thornton 2003;Kurucz et al. 2008;Lyon 2009;Porter and Kramer 2006;Margolis and Walsh 2003) -and how different market contexts or firm characteristics may influence these motivations (Kemper et al. 2013;McWilliams and Siegel 2001;King et al. 2009;Potoski and Prakash 2012;Haufler 2009;Khanna & Brouhle 2009;Haufler 2009;Brik 2013). Finally, we are beginning to know when consumers are more likely to engage in PC behaviors (Ferrer-Fons and Fraile 2014;Wicks et al. 2014;Shah et al. 2007). ...
We live in a world of globalized production organized into complex value chains. This new reality has posed challenges because our governance system, which is based on territorial state sovereignty, places boundaries that are impermeable to regulators while globally networked firms slip through them with relative ease. In reaction to this global governance challenge there has been a rise of private politics by transnational advocacy organizations. These movements aim to get companies to engage in behavior that goes beyond compliance with national laws, often through participation in multi-stakeholder initiatives. In addition to changing specific corporate behaviors, transnational private political actions have resulted in new modes of global governance that are hybridized or entail “governance without government”. Unfortunately, the largely domestic political consumerism literature is ill-equipped to grapple with these trends because it fails to recognize the iterative nature of political consumerism campaigns, as well as the importance of inter-firm dynamics and the linking of private and public politics. I use case analysis of the Enough Project’s conflict minerals campaign to illustrate the argument. The Enough Project utilized an indirect political consumerism strategy in which it differentiated firms by rewarding leaders and shaming laggards. It also linked public and private politics throughout the campaign. Following the case study, I explore the meaning and implications of analyzing global political consumerism campaigns as iterative campaigns that link public and private politics and ultimately seek to build systems of non-state and hybrid governance.
... Nevertheless, previous research has addressed the point that the interrelation of regulatory instruments might differ between countries (e.g. Prakash and Potoski, 2012;Berliner and Prakash, 2013). For further validation, upcoming research has to replicate our approach on an international level. ...
This study analyses the impact of formal standards and regulation on firms’ innovation efficiency, considering different levels of market uncertainty. We argue that formal standards and regulation have different effects, depending on the extent of market uncertainty derived from theoretical considerations about information asymmetry and regulatory capture. Our empirical analysis is based on the German Community Innovation Survey (CIS). The results show that formal standards lead to lower innovation efficiency in markets with low uncertainty, while regulations have the opposite effect. In cases of high market uncertainty, we observe that regulation leads to lower innovation efficiency, while formal standards have the reverse effect. Our results have important implications for the future application of both instruments, showing that their benefits heavily depend on the market environment.
This Element contends that regulators can and should shame companies into climate-responsible behavior by publicizing information on corporate contribution to climate change. Drawing on theories of regulatory shaming and environmental disclosure, the Element introduces a "regulatory climate shaming" framework, which utilizes corporate reputational sensitivities and the willingness of stakeholders to hold firms accountable for their actions in the climate crisis context. The Element explores the developing landscape of climate shaming practices employed by governmental regulators in various jurisdictions via rankings, ratings, labeling, company reporting, lists, online databases, and other forms of information-sharing regarding corporate climate performance and compliance. Against the backdrop of insufficient climate law and regulation worldwide, the Element offers a rich normative and descriptive theory and viable policy directions for regulatory climate shaming, taking into account the promises and pitfalls of this nascent approach as well as insights gained from implementing regulatory shaming in other fields. https://www.cambridge.org/ph/universitypress/subjects/earth-and-environmental-science/climatology-and-climate-change/fighting-climate-change-through-shaming#resources
The structure and governance of global supply chains not only shape social and environmental outcomes for both countries and firms, but also affect the quality of life at the local level, for those who live and work at each site of production. Existing literature on supply chain governance focuses on the transnational firm and has yielded a wide range of theoretical and empirical findings about firm- and nation-level outcomes. However, we know less about the drivers of variation in more localized social and environmental outcomes across production sites, which may result from local, national, and global actors and institutions that may interact. I provide a brief overview of the dominant literature on supply chain governance, highlighting the tendency to take an actor-centric approach. I then identify opportunities to study local social and environmental consequences of networked production using a more explicitly multi-actor and multi-level approach that can allow us to identify potential trade-offs, double wins, or spillovers between social and environmental outcomes.
We examine the impact of three business strategies separately and in combination on the tendency for firms to engage in corruption. Using a sample of 56,827 firm‐year observations for small‐ and medium‐sized enterprises (SMEs) over the 2006–2018 period, we find that firms with business group affiliations are more likely to engage in corrupt practices in countries with low business freedom. However, those in countries with high business freedom are less likely to do so. We also find that firms that engage the services of external auditors and adopt international standards are less likely to be corrupt, especially in countries with weak financial reporting standards. Our results also show that corruption intensity reduces even more for firms that employ the three strategies, whether we consider institutional factors or not. This result holds when we use a three‐way interaction term. We conclude that the three strategies are mutually reinforcing and that firm‐level and country‐level efforts complement each other in mitigating corruption.
This study aims to investigate the effect of Audit Committee, firm characteristics, and ISO 14001 on environmental performance. Also, this study analyzes the effect of environmental performance on the financial performance. The data analysis was performed using multiple linear regression Data collection techniques are carried out using annual reports of companies receiving PROPER Award and listed on the Indonesia Stock Exchanges in the year of 2015–2019. The results showed that Audit Committee, firm characteristics, and ISO 14001 significantly influenced environmental performance. Another result is that environmental performance has a positive effect on the financial performance. This study contributes as a reference for the government to make environmental policies so as to encourage the achievement of sustainable development goals (SDGs). This study measures environmental performance using only PROPER which cannot be generalized to all companies listed on the Indonesia Stock Exchanges and other markets. The next studies should use other proxies to measure environmental performance and use other data collection methods such as interviews.
The book studies emergence and consolidation of voluntary sustainability standards (VSS); private standards defining sustainability-related product features. The book takes stock of their success and their potential in mediating between economic and non-economic concerns of global production. Despite their private and voluntary nature, VSS generate profound consequences for the producers seeking certification, for the consumers purchasing certified products, and for others affected by their standards. VSS are used by public authorities in the EU as a functional complement to public measures regulating global value chains. At this juncture of market proliferation and public use of private regimes, this book studies how public authority can control, coordinate and review VSS. It studies how the regulation of VSS could unfold through substantive and procedural legal requirements in the domain of European Union law and World Trade Organisation law, as well as through the incentives offered by VSS employment in public measures.
Most institutional studies have conceptualized institutions within the borders of national contexts as relevant to the global orientation of organizations. The world society approach in institutional theory, however, highlights the existence of a global institutional realm (i.e., driven by a process of cultural rationalization) and proposes that as a consequence of both global and national institutional demands, organizations are constructed as actors with global identities-the orientation of an organization toward the world or away from it. We argue that the global identity of organizations varies with the national institutional traditions within which organizations originate, the exposure of organizations to various instantiations of cultural rationalization within national contexts, and the extent to which organizations are governed by traditional forms of authority (i.e., family, nation-state). We tested our hypotheses empirically, using data from 366 corporations listed in major stock indices in 22 countries around the globe. The empirical results support our argument.
Purpose
The current research aims to explore how the implementation of new regulatory forms contributes to firm self-regulation.
Design/methodology/approach
Longitudinal analysis of firm-initiated product recalls for 15 manufacturers in the US automobile industry from 1966–2012.
Findings
Examining firm-initiated product recalls for 15 manufacturers in the US automobile industry from 1966–2012 has several important findings regarding how the introduction of specific regulatory forms contributes to firm-initiated vehicle recalls. Firms are not likely to self-regulate in response to surveillance or standards-based regulation while information-based regulation results in a greater likelihood of firm self-regulation.
Originality/value
This result suggests that even at the product level; firms become increasingly motivated to self-regulate as regulators introduce information-based regulations.
We explore the role of ISO 14001 certification in stimulating increased exports for certified firms. The rationale for the study is that certification conveys an important market signal that the certified firm's production process adheres to internationally accepted standards of environmental quality. That is, the perceived credibility of ISO 14001 certification lowers informational barriers about the environmental attributes of the certified firm's products, especially in foreign markets, boosting exports. We put this proposition to an empirical test using the gravity trade model and a panel of South Korean manufacturing industries exporting to 176 countries over the 1988–2015 period. Our results show that ISO 14001 certification generates a robust positive push effect for South Korean manufacturing exports. We further find that this effect varies based on the level of economic development of the destination market, with a more pronounced impact of certification on exports to high‐income countries than to middle and lower income countries.
Over the last five years, several scholars from a range of disciplines have started to analyse how Artificial Intelligence (AI) affects businesses outcomes. This research effort has produced many predictions on the expected impact of automation on labour demand and equilibrium employment. However, most of the expected results are dependent on how businesses change their behaviour due to adopting AI. We argue that, as AI diffuses across the economy, changing behaviour is a necessary outcome for incumbents: the argument is that the diffusion of AI across an industry generates the conditions for a process of value migration from incumbents to new entrants (Helper et al. 2018); in these cases, the only mechanism available to incumbents to offset the negative impact of the migration process is by changing the architecture of their business, i.e., the business model. However, companies can choose from several AI-driven business models; their preference for one model is driven by many industry-level factors such as technical standards, the structure of the technology industry and the presence of an ethical framework for the use of AI. This monologue summarises the existing literature on business model innovation and AI; it then analyses the industry-level factors that may shape the business-level preference for specific business models. Finally, the monologue offers some suggestions for future research in the area.
Purpose
This study aims to examine the effect of institutional ownership, audit committee, and types of industry on environmental investment. Furthermore, this research investigates the consequences of environmental investments on firm financial performance.
Design/methodology/approach
The sample consisted of 145 companies listed on the Indonesia Stock Exchanges and receiving PROPER awards issued by the Ministry of Environment, Republic of Indonesia in the year 2009-2015. The data were then analyzed using ordinal logistic regression and multiple regression.
Findings
The findings showed that environmental investment was significantly affected by types of industry. However, institutional ownership and audit committee did not influence environmental investment. Finally, the finding indicated that environmental investments positively affected firm financial performance.
Research limitations/implications
This research only covered companies listed on the Indonesia Stock Exchanges and receiving PROPER awards. Thus, the findings cannot be generalized for all companies in Indonesia and other markets
Originality/value
This study is the first effort intended to investigate the determinants and consequences of environmental investment which have been ignored by previous studies, especially in the Asian emerging markets. This study at least provides us with two main contributions. Firstly, the findings on determinants of environmental investment can be used by governments in Asian countries, especially Indonesia as a reference in making policies concerning the obligations of companies to the environmental problems. Secondly, the finding on the relationship of environmental investment and financial performance can be used by companies as strategies to generate profits without destroying the environment.
In this chapter we discuss the relationship between management ideas and standards. We argue that all management ideas can be understood as standards in the sense of shared, voluntary, and descriptive, rather than prescriptive, rules that one or several actors or organizations choose to apply. A few management ideas are presented in the form of codified standards, i.e. standards in a narrower sense. We explore why and how some management ideas are 'translated' into codified standards and how this process affects the management ideas in turn. We also discuss the wider (intended and unintended) consequences of turning management ideas into codified standards.
This book is unique in presenting an interdisciplinary conversation between jurists and logicians. It brings together scholars from both law and philosophy and looks at the application of 'the new logics' to law and legal ordering, in a number of legal systems. The first Part explores the ways in which the new logics shed light on the functioning of legal orders, including the structure of legal argumentation and the rules of evidence. The second addresses how non-classical logics can help us to understand the interactions between multiple legal orders, in a range of contexts including domestic and international law. The final Part examines particular issues in the applicability of non-classical logics to legal reasoning. This book will be of interest to jurisprudence and logic scholars and students who want to deepen their understanding of relationships between law and legal reasoning, and learn about recent developments in formal logic.
This chapter acknowledges that businesses are increasingly considering environmental stewardship and social responsibility goals equal to profit-making goals. These businesses take an expanded view of stakeholders and are transparent about operations. They set environmental goals such as stewardship of biodiversity and water resources and minimizing carbon footprint, and social goals such as inclusion and diversity. They focus on the environmental impacts of their supply chain and partner with other firms, governmental organizations, and non-profits to address critical environmental and social issues. To highlight sustainable business practices, a case study of Counter Culture Coffee, a small, privately held coffee distributor, is offered. Lessons learned from Counter Culture include the value of experimentation and the need to both measure and communicate successes and failures.
The negative effects of globalization and rapid growth of industries on environment have changed the business paradigm from profit issues to profit, people and planet (triple bottom line). Consequently, a number of companies have invested their money in environmental issues (called as green investment). This study aims to investigate the effect of firm characteristics on green investment and how green investment influences financial performance. Using annual reports of companies receiving the Program for Pollution Control, Evaluation and Rating (PROPER) award and listed on the Indonesia Stock Exchanges in the year of 2009-2014 as research data, the findings showed that firm size, foreign ownership, industry profile, and frequency of audit committee meeting significantly influenced green investment whereas ISO14001 management certification had no effect on it. Interestingly, green investment positively determined an increase in firm financial performance. This reveals that the better the green investment, the higher the financial performance of the companies. The findings contribute to the importance of adopting green investment as a company's strategy to increase profit without destroying the environment. Secondly, this finding can be used by government as a reference for formulating any regulations concerning business and environment. Finally, the finding contributes to the importance of including environmental issues in business education.
The state-based system of global governance has struggled for more than a generation to adjust to the expanding reach and growing influence of transnational corporations. The United Nations first attempted to establish binding international rules to govern the activities of transnationals in the 1970s. That endeavor was initiated by developing countries as part of a broader regulatory program with redistributive aims known as the New International Economic Order. Human rights did not feature in this initiative. The Soviet bloc supported it while most industrialized countries were opposed. Negotiations ground to a halt after more than a decade, though they were not formally abandoned until 1992.
Using Japanese facility-level data, we estimate the effects of ISO 14001 certification on the promotion of more advanced practices, namely green supply chain management (GSCM). Our results show that ISO 14001 promotes GSCM practices. Facilities with environmental management systems (EMS) certified to ISO 14001 are 40% more likely to assess their suppliers’ environmental performance and 50% more likely to require that their suppliers undertake specific environmental practices. Further, government programs that encourage voluntary EMS adoption indirectly promote GSCM practices. These programs increase the probabilities that facilities will assess their suppliers’ environmental performance and require suppliers to undertake specific environmental practices by 7% and 8%, respectively. Combined, these findings suggest that there may be significant but previously unnoticed spillover effects of ISO 14001 and government promotion of voluntary action.
Multiplicative interaction models are common in the quantitative political science literature. This is so for good reason.
Institutional arguments frequently imply that the relationship between political inputs and outcomes varies depending on the
institutional context. Models of strategic interaction typically produce conditional hypotheses as well. Although conditional
hypotheses are ubiquitous in political science and multiplicative interaction models have been found to capture their intuition
quite well, a survey of the top three political science journals from 1998 to 2002 suggests that the execution of these models
is often flawed and inferential errors are common. We believe that considerable progress in our understanding of the political
world can occur if scholars follow the simple checklist of dos and don'ts for using multiplicative interaction models presented
in this article. Only 10% of the articles in our survey followed the checklist.
Despite decades of policy experimentation, the ultimate goal of efficient and effective environmental regulation has continued to elude policy-makers and regulatory theorists. The less than satisfactory performance of both government and market approaches to environmental protection has led to the introduction of a broader range of policy mechanisms, such as education, information-based strategies, economic instruments and self-regulation. Yet these various policy instruments are usually treated as alternatives to one another rather than as complementary. Drawing from studies in North America, Europe and Australia, the authors show how the design of complementary combinations of policy instruments, tailored to particular environmental goals and circumstances, will produce more effective and efficient policy outcomes. They also confront the critical problem of how, at a time of fiscal constraint and small government, environmental policy might still be designed in ways that improve outcomes both for the environment and for business.
This article examines the concept of the corporate “social license,” which governs the extent to which a corporation is constrained to meet societal expectations and avoid activities that societies (or influential elements within them) deem unacceptable, whether or not those expectations are embodied in law. It examines the social license empirically, as it relates to one social problem–environmental protection–and as it relates to one particular industry: pulp and paper manufacturing. It shows try the social license is important, the circumstances in which it may encourage companies to go “beyond compliance” with regulation, how its terms are monitored and enforced, and how it interacts with what we term the regulatory and economic licenses. Overall, this research demonstrates that corporate environmental behavior cannot be explained purely in terms of instrumental threats and moral obligations to comply with the law, and that the increasing incidence of “beyond compliance” corporate behavior can be better explained in terms of the interplay between social pressures and economic constraints.
When environmental issues emerged on the international agenda in the late 1960s and early 1970s, the United States was of one of the strongest and most consistent supporters of international environmental treaties and agreements. The member states of the European Union subsequently ratified all the international treaties created in this period, but U.S. leadership was crucial and European states were laggards in many cases. Since the 1990s, the political dynamics of international environmental policy have shifted, with the European Union emerging as a global environmental leader and the United States repeatedly opposing multilateral environmental agreements. The authors argue that a “regulatory politics” model that synthesizes the effects of domestic politics and international regulatory competition provides the most powerful explanation of why the United States and European Union have “traded places” with respect to their support for international environmental agreements.
National activities to protect the natural environment are on the rise. Conventional explanations of the phenomenon emphasize domestic processes, set in motion by environmental degradation and economic affluence. We propose instead a top-down causal imagery that hinges on a global redefinition of the 'nation-state' to include environmental protection as a basic state responsibility. We test our view using event-history analyses of five indicators of environmentalization: The proliferation of (1) national parks, (2) chapters of international environmental associations, (3) memberships in inter-governmental environmental organizations, (4) environmental impact assessment laws, and (5) environmental ministries in countries around the world over the twentieth century. For all five measures, the top-down global explanation proves stronger than the bottom-up domestic alternative: The global institutionalization of the principle that nation-states bear responsibility for environmental protection drives national activities to protect the environment. This is especially true in countries with dense ties to world society and prolific 'receptor sites,' even when controlling for domestic degradation and affluence. It appears that blueprints of nation-state environmentalization, which themselves become more universalistic over time, are drawn in world society before being diffused to and enacted by individual countries.
This research note summarizes version 3.0 of the Correlates of War Direct Contiguity data set, which covers the geographic proximity of all directly contiguous states in the international system during the period 1816-2000. After a brief discussion of the role that geographic proximity plays in international relations, the coding rules and procedures used for this data set are reviewed. The changes and additions to this updated version of the data are then explained. This note concludes with a basic statistical summary of the updated data set
Theoretical and empirical studies have shown that democracy
and corruption influence environmental policies. In this chapter, we empirically analyse the relative importance of these determinants of environmental policy. When these variables are jointly included as explanatory variables in a multiple regression analysis, we find that corruption stands out as a substantial and significant determinant of environmental policies, while proxies for democracy
have an insignificant impact. Nevertheless, democracy
could affect environmental policy stringency
given that countries with a history of democratic rule tend to be less corrupt (see Chap. 3). A discussion of our results in the context of the Environmental Kuznets Curve literature follows. We argue that improving environmental quality following increasing income is less probable in developing countries with institutional disarray. Finally, and more optimistically, when considering our results in the context of institutions and growth, we conclude that there is scope for reaping a double dividend: reductions in corruption induce higher economic growth rates and stricter environmental policies.
This paper examines how widely held country images affect attitudes towards a country's products and services and ability to attract investment, businesses and tourists. It assesses the role of strategic marketing management in promoting the country's image, attractiveness and products.Journal of Brand Management (2002) 9, 249-261; doi:10.1057/palgrave.bm.2540076
Standards have become one of the most important nontariff barriers to trade, especially national product standards that specify design or performance characteristics of manufactured goods. Divergent national standards often inhibit trade, whereas regional and international standards increasingly serve as instruments of trade liberalization. Consequently, the setting of international standards—seemingly technical and apolitical—is rapidly becoming an issue of economic and political salience. But who sets international standards? Who wins, who loses? This article offers a fresh analytical approach to the study of international standards, which the authors call the institutional complementarities approach. It builds on insights from realism and the “Battle of the Sexes” coordination game but emphasizes complementarities of historically conditioned standardization systems at the national level with the institutional structure of standardization at the international level. It posits that, after controlling for other factors that influence involvement in international standardization, differences in institutional complementarities play a critical though largely accidental role in placing firms from different countries or regions in a first- or second-mover position when standardization becomes global. The authors illustrate the insightfulness of this approach through statistical analyses of the first scientific set of data on standards use and standardization, collected by the authors through an international online survey.
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.
This study explores the development of communitarian regulation in the American chemical industry by focusing on the history and challenges facing Responsible Care, the leading example of regulation by an industry association on the environmental scene today.
The most comprehensive efforts to develop a new evolutionary approach to law are found in the work of Nonet and Selznick in the United States and Habermas and Luhmann in Germany. While these theorists are concerned with a common problem-the crisis of formal rationality of law-they differ drastically in their accounts of the problem and their vision of the future. This paper tries to resolve these differences by first decomposing and then restructuring the diverse neo-evolutionary models. Using a more comprehensive model of socio-legal covariation, the author identifies an emerging kind of legal structure which he calls reflexive law. Reflexive law is characterized by a new kind of legal self-restraint. Instead of taking over regulatory responsibility for the outcome of social processes, reflexive law restricts itself to the installation, correction, and redefinition of democratic self-regulatory mechanisms. The author identifies areas of private law in which reflexive solutions are arguably emerging, and he spells out the consequences which a concern for reflexivity has for a renewed sociological jurisprudence.
An important ensemble of transnational, transgovernmental regulatory institutions has emerged in the forestry sector over the past decade. These forest certification programmes set global standards for proper forest management and apply them through institutionalized licensing and inspection programmes. Similar programmes are appearing in other sectors. Developed largely by environmental NGOs and industry associations rather than governments, forest certification programmes are nominally voluntary, but are becoming increasingly mandatory in practice. They are also gradually linking with government regulatory and management programmes in various ways, while remaining in tension both with each other and with government programmes. The overall regulatory system is thus highly dynamic, as the programmes compete with each other for business and also with government regulatory programmes for public acceptance. This paper describes and assesses the administrative law - i.e., the requirements for rule-making and rule application - of the emerging global forest regulatory system. It finds that while the certification programmes are becoming increasingly transparent and participatory, often comparing favourably with government programmes, some of them still need considerable improvement and all of them face serious challenges. It concludes with a discussion of the problem of accountability, outlining the possibility that the programmes exemplify an emerging new kind of learning accountability.
Why do some business firms and not others work hard to advance regulatory values such as environmental protection and comply with regulations? Previous research indicates that business firms are influenced in that regard by a number of variables—not merely the perceived likelihood of legal punishment but also the risk of negative reactions by societal actors (which we call “social license pressures”) and the intensity of managers' commitment to norms of law-abidingness and environmentalism. This article reports on a study of control of diesel emissions in the trucking industry, a highly competitive market with many small firms, mobile pollution sources, expensive “best control technologies,” and weak regulatory demands. In contrast to findings in studies of large firms, we found that social license pressures on small trucking firms are minimal. Trucking companies' environmental performance—good and bad—flows from managers' economic choices, which are influenced by their particular market niche. In such highly competitive, small-firm market contexts, these findings imply, significant improvement in environmental performance is not likely without strong direct regulatory pressures.
This article examines the institutional impact of environmental management systems (EMSs), focusing on ISO 14001. It develops a pluralistic framework for thinking about the dynamic of corporate self-regulation that we term the polyphonic model. It argues that the adoption of ISO 14001 can move the firm into a new equilibrium trajectory, which enmeshes together environmental and economic goals and reflects greater sensitivity to ecological concerns. There is a positive reciprocal cycle between the pro-environmental structural changes induced by ISO 14001 and the employees' attitudes toward the firm and the environment. In order to examine ISO 14001 institutional impact, we conducted a series of interviews with managers and administered questionnaires to employees in 24 Israeli firms with and without certification. The findings indicate that the perceived environmental commitment of certified firms was higher than that of noncertified firms and was higher among employees that perceived the EMS as more highly integrated in the firm. Perceptions of the standard's integration were also found to be positively correlated with personal environmental commitment. The results also indicate that the increase in the firm's environmental commitment was positively associated with employees' organizational citizenship behavior within certified firms. Further indications of the pro-environmental dynamic induced by ISO 14001 were found in the in-depth interviews.
This research explores why some facilities accrue greater costs when adopting an environmental management system (EMS) and why costs vary among three different ownership structures. Using survey data of organizations that documented their EMS adoption costs over a 3-year period, the results show that publicly traded facilities had stronger complementary capabilities prior to EMS adoption and therefore lower adoption costs. By contrast, government facilities and privately owned enterprises had fewer capabilities and accrued higher EMS adoption costs. The development of organizational capabilities and resources therefore appears to be a function of both organizational exploitation of imperfect or incomplete market factors, and the institutional context of these decisions. Copyright © 2006 John Wiley & Sons, Ltd.
This book studies environmental law and policy in India, which affects all sections of society. Those most deeply affected by it are the poor. They are the first victims of poor sanitation, polluted air, and contaminated water. Since the 1970s, efforts to protect environmental quality have met with limited success, posing enduring challenges for policy designers and decision-makers entrusted with protecting and preserving natural resources. This third edition retains the familiar analytical structure of the second edition and includes all major developments since then. It focuses on Indian environmental law, policy, problems, and needs. The book covers air and water pollution, forests, wildlife, noise pollution, common property resources and tribal communities, environmental impact assessment, coastal regulations, large projects, urban problems, the National Green Tribunal, hazardous substances, transnational environmental policies, and international environment law. In addition, It identifies and analyses emerging conflicts in Indian environmental jurisprudence with a focus on environmental justice.
Over the past two decades, governments have delegated extensive regulatory authority to international private-sector organizations. This internationalization and privatization of rule making has been motivated not only by the economic benefits of common rules for global markets, but also by the realization that government regulators often lack the expertise and resources to deal with increasingly complex and urgent regulatory tasks.The New Global Rulersexamines who writes the rules in international private organizations, as well as who wins, who loses--and why.Tim B the and Walter Mattli examine three powerful global private regulators: the International Accounting Standards Board, which develops financial reporting rules used by corporations in more than a hundred countries; and the International Organization for Standardization and the International Electrotechnical Commission, which account for 85 percent of all international product standards. B the and Mattli offer both a new framework for understanding global private regulation and detailed empirical analyses of such regulation based on multi-country, multi-industry business surveys. They find that global rule making by technical experts is highly political, and that even though rule making has shifted to the international level, domestic institutions remain crucial. Influence in this form of global private governance is not a function of the economic power of states, but of the ability of domestic standard-setters to provide timely information and speak with a single voice. B the and Mattli show how domestic institutions' abilities differ, particularly between the two main standardization players, the United States and Europe.
Many decisions are based on beliefs concerning the likelihood of uncertain events such as the outcome of an election, the guilt of a defendant, or the future value of the dollar. Occasionally, beliefs concerning uncertain events are expressed in numerical form as odds or subjective probabilities. In general, the heuristics are quite useful, but sometimes they lead to severe and systematic errors. The subjective assessment of probability resembles the subjective assessment of physical quantities such as distance or size. These judgments are all based on data of limited validity, which are processed according to heuristic rules. However, the reliance on this rule leads to systematic errors in the estimation of distance. This chapter describes three heuristics that are employed in making judgments under uncertainty. The first is representativeness, which is usually employed when people are asked to judge the probability that an object or event belongs to a class or event. The second is the availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development, and the third is adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
Plan of the Book. Introduction: Environmental Management.Part 1: BETWEEN REGULATION AND SELF-REGULATION.1. Business Perspectives on Regulation. 2. International Policy and Voluntary Initiatives. 3. Strategies and The Environment.Part 2: FROM THEORY TO PRACTICE.4. Environmental Management Systems and Standards. 5. Environmental Reporting. 6. Environmental Management Accounting. 7. Conclusions: Dilemmas of Environmental Management. Bibliography. Index.
Institution theory and the resource-based theory of the firm represent two explanations of how organizations adapt to institutional change. These two theories are compared, contrasted, and applied to the context of environmental management. Arguments based on the theories are used to generate hypotheses about the diffusion and efficacy of the ISO 14001 system, a set of voluntary environmental standards. Empirical tests of the factors lying behind adoption of the ISO 14001 standards and whether or not the standards lead to toxic emissions reductions are conducted on a set of 316 electronics facilities located in the United States. Results support the idea that the standards allow facilities to "catch-up" to best practices if they are an especially high producer of toxic emissions. The paper ties the analysis back to current strategic management theories about organizations and institutional change, and then concludes by assessing the value of ISO 14001 versus traditional government regulation from the point of view of professionals and policy-makers.
Norms shape policy when they get translated into concrete programs. What if a widely shared norm gets translated into a weak program? How might this influence the program's legitimacy? We examine these issues in the context of the United Nations Global Compact, a voluntary program that embodies the widely shared norm of corporate responsibility. While both international intergovernmental organization (IGO) and international non-governmental organization (INGO) networks support this norm, they differ on the adequacy of the Compact's program design. We explore how this tension affects the diffusion of the Compact across countries, which vary in their levels of embeddedness in IGO and INGO networks. Our findings suggest that embeddedness in IGO networks encourages adoption, while embeddedness in INGO networks discourages it. Our analysis provides important lessons for sponsors of voluntary governance mechanisms. Widespread support for a norm does not automatically ensure support for a program that claims to embody it.
How do domestic political institutions, specifically veto players, mediate the effect of trade competition on regulatory races in the environmental area? Is the mediating effect more pronounced for more visible pollution issues such as air pollution in relation to less visible water pollution? Governments are expected to respond to trade pressures by lowering regulatory costs. To do so, governments can rewrite regulations (de jure policy change) and/or lower the enforcement of existing regulations (de facto policy change). In contrast with de facto changes, de jure policy changes are more likely to invite opposition from pro-environment constituencies, and are therefore politically more difficult. Our analysis of 140 countries for the period 1980–2003 suggests that in response to trade pressures, governments do not lower regulatory stringency by rewriting (de jure) environmental regulations for any level of domestic constraints. In contrast, when political constraints are low, governments respond to trade pressures by adjusting regulatory stringency via de facto changes. Moreover, in the context of de facto policy changes, the constraining effect of veto players is more pronounced for air pollution (sulphur dioxide) in comparison to water pollution (biochemical oxygen demand). This is because air pollution is a more visible pollution issue around which organized, urban constituencies tend to mobilize.
Twenty years ago, the US had virtually no overall environmental policy. Since then, one has evolved as a result of accumulated legislation, much of which was crafted in reaction to specific events, typically real or potential disasters. The familiar names of Love Canal, Times Beach, Bhopal and others are the symbolic anchor points of that evolution, which yielded Superfund, the Resource Conservation and Recovery Act, the Superfund Amendments and Reauthorization Act, and other environmental statutes. The laws in each case were developed in response to particular environmental and health issues--clean water for drinking and recreation, unpolluted air, safe production of chemicals and chemical-based products. The result was a growing body of environmental legislation that eventually became an accumulate of requirements lacking internal consistency or coherence. Because policymaking followed, rather than guided, legislative actions, the policy itself became inconsistent and sometimes illogical. Like a drum that gradually and indiscriminately is filled with a mixture of mutually reactive chemicals, environmental policy increasingly became a volatile source of concern for those industries in whose midst it had been placed. Lately, there is growing consensus that the drum not only has been overfilled, it also is leaking.
This article examines why global corporate social responsibility (CSR) frameworks have gained popularity in the past decade, despite their uncertain costs and benefits, and how they affect adherents’ behavior. We focus on the two largest global frameworks—the United Nations Global Compact and the Global Reporting Initiative—to examine patterns of CSR adoption by governments and corporations. Drawing on institutional and political-economy theories, we develop a new analytic framework that focuses on four key environmental factors—global institutional pressure, local receptivity, foreign economic penetration, and national economic system. We propose two arguments about the relationship between stated commitment and subsequent action: decoupling due to lack of capacity and organized hypocrisy due to lack of will. Our cross-national time-series analyses show that global institutional pressure through nongovernmental linkages encourages CSR adoption, but this pressure leads to ceremonial commitment in developed countries and to substantive commitment in developing countries. Moreover, in developed countries, liberal economic policies increase ceremonial commitment, suggesting a pattern of organized hypocrisy whereby corporations in developed countries make discursive commitments without subsequent action. We also find that in developing countries, short-term trade relations exert greater influence on corporate CSR behavior than do long-term investment transactions.
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.
Increasing attention to environmental management has raised many new dilemmas for firms. How can managers deal with environmental issues in a competitive situation that is international and heterogeneous? What are the strategic and financial implications of environmental management? How can they cope with regulation, considering the choices which range from compliance to voluntary initiatives? And how do other firms organise their environmental management and communicate with stakeholders? This book examines these different topics, without dogma or prescription. It demonstrates the complexity of an area in which there are often no right or easy answers. The Economics of Environmental Management: 7 shows the links between the main functional areas of a business and environmental management; 7 examines regulation and self-regulation in different countries and worldwide; 7 pays specific attention to multinational enterprises; 7 gives an international state of the art on environmental management systems and standards (especially ISO 14001 and EMAS); on environmental reporting and verification; and on environmental management accounting; 7 contains international case examples and a wealth of annotated references to paper and electronic sources.
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.
The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. By David Vogel. Washington, DC: The Brookings Institute, 2005. 222p. $28.95.
Is there a “market for virtue”? If so, what can it do, and what can it not do to improve our world? In his incisive new book, David Vogel takes aim at these questions and the now-fashionable claim that there is a business case for corporate social responsibility (CSR). He concludes that there is no business case that can be generalized to all firms per se, but there is a political case for broadening what we mean by that much-used term.
Environmental policy in the United States has always been characterized by high levels of political conflict. At the same time, however, policy makers have shown a capacity to learn from their own and others' experience. This article examines U.S. environmental policy since 1970 as a learning process and, more specifically, as an effort to develop three kinds of capacities for policy learning. The first decade and a half may be seen in terms of technical learning, characterized by a high degree of technical and legal proficiency, but also narrow problem definitions, institutional fragmentation, and adversarial relations among actors. In the 1980s, growing recognition of deficiencies in technical learning led to a search for new goals, strategies, and policy instruments, in what may be termed conceptual learning . By the early 1990s, policy makers also recognized a need for a new set of capacities at social learning, reflecting trends in European environmental policy, international interest in the concept of sustainability, and dissatisfaction with the U.S. experience. Social learning stresses communication and interaction among actors. Most industrial nations, including the United States, are working to develop and integrate capacities for all three kinds of learning. Efforts to integrate capacities for conceptual and social learning in the United States have had mixed success, however, because the institutional and legal framework for environmental policy still is founded on technical learning.
This chapter discusses the prescription of EU environmental regulations for new member states. It can be argued that these countries should be allowed looser directives as a way to take into consideration their lower-income
levels and correspondingly different priorities. The chapter estimates the determinants of environmental policies’ stringency in the European enlargement context. We find that corruption levels are the most important factor in explaining the variance in environmental policies in the enlarged EU. Most notably differences in corruption levels across countries appear to be more important than income
differences. Thus it is argued that lower environmental standards in new member states are not necessarily implied by lower-income
levels, but more likely reflect low institutional quality. We argue that harmonization of environmental policies at the EU level can be a way to tackle this problem, and we provide a further rationale for new member states to adjust to existing EU environmental directives.