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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.
... 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.
... 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.
... While the occurrence of private governance may be the result of intentional delegation of authority by states to private organizations in highly technical areas such as accounting (Büthe & Mattli, 2013), in many CSR-related issue areas it is tied to governments' inability or unwillingness to regulate the global operations of MNEs. As a consequence, CSR has been characterized as a signal of social and environmental stewardship sent by MNEs to stakeholders in fields marked by high opacity, in which MNE behavior may not be observable by all stakeholders, and issues at hand have complex causes and no clear solution (Berliner & Prakash, 2013;Wijen, 2014). ...
... A host country perspective on CSR adoption advances knowledge about MNEs in at least two ways. First, MNE operations in host countries suggest that many stakeholders may not be able to observe these activities in ways comparable to home country operations (Berliner & Prakash, 2013;Surroca et al., 2013). Instead, MNEs engage in signaling certain qualities by means of CSR to convey legitimacy, even when local contexts do not require such signals (Wijen, 2014). ...
... Meyer & Nguyen, 2005), in this study I focus on the effect of voids on the perceptions of MNEs as socially responsible organizations. I draw on nation-level attributes as these are most visible to MNE stakeholders and thus most relevant for managers that seek to legitimize presence in a given context (Berliner, Greenleaf, Lake, & Noveck, 2015a;Berliner & Prakash, 2013). ...
Drawing on institutional theory, this study examines the question of how host country institutions affect corporate social responsibility (CSR) adoption by multinational enterprises (MNEs). I propose that CSR encompasses a set of practices that MNEs draw on to signal legitimacy in different kinds of institutional contexts – contexts that vary in how they shape issue salience and stakeholder power in a given issue field. Building on ideas related to field opacity and the managerial implications of CSR, I study why MNEs adopt two distinct types of CSR policies: standards-based CSR in response to contexts marked by issue salience, and rights-based CSR in response to contexts marked by stakeholder power. To test these hypotheses, I use subsidiary and firm-level data from a sample of 540 Western European MNEs in the issue field of labor rights. Results show that MNEs strategically adopt these CSR policies related to their presence in distinct institutional contexts. The study offers implications for how MNEs manage the legitimacy of their global operations and how CSR, as a form of private governance, can emerge as both a substitute and complement to regulatory institutions.
... 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.
... 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.
... Even though MNCs are often used as the empirical setting in which to study CSR adoption (Lim & Tsutsui, 2012), these findings have yet to be reconciled with studies of MNC host countries, which have shown that the mere presence of companies in many regions of the world often generates calls for corporate responsibility for their stakeholders (Lamin & Zaheer, 2012;Wijen, 2014). For example, host country regulatory standards seen as weakly institutionalized by any of the firm's stakeholders, either in absolute or comparative terms, may create pressures on MNCs to adopt CSR to signal stewardship in social or environmental matters (Berliner & Prakash, 2013;Brammer, Pavelin, & Porter, 2009). Alternatively, MNCs may need to adopt CSR if host country institutions empower stakeholders to hold firms to higher social performance standards, such that CSR creates legitimacy with salient local stakeholders (Campbell, Eden, & Miller, 2012;Young & Makhija, 2014). ...
... Because such fields prescribe behavioral norms, MNCs need to engage in legitimation efforts towards these increasingly interconnected global stakeholders to show adherence to such behavioral prescriptions (Hoffman, 1999;Meyer, Boli, Thomas & Ramirez, 1997). MNCs active in host countries might be exposed involuntarily to such issues (Bondy & Starkey, 2014;Crilly, 2011;Hoffman, 1999), yet by operating in territories with weak institutions, the legitimacy of the MNC may be called into question based on concerns that the firm may be complicit in exploiting the conditions found in institutional voids (Berliner & Prakash, 2013;Lamin & Zaheer, 2012;Zhao, Tan & Park, 2014). Hence, by adopting CSR, MNCs may be able to signal responsible conduct in the absence of institutionalized rules, although commitment to CSR may diverge from actual organizational implementation (Crilly, Zollo & Hansen, 2012;Surroca et al., 2013) In sum, existing literature in IB and organization studies paints an increasingly nuanced picture of the drivers of CSR adoption by MNCs. ...
Although multinational corporations (MNCs) are central actors in the governance of the global economy, our knowledge of the institutional conditions under which modes of private governance emerge is limited. Given their global nature spanning different countries, MNCs are often associated with high levels of corporate social responsibility (CSR) adoption, a distinct mode of private governance whereby firms engage with stakeholder expectations regarding social and environmental standards. In this paper, we apply insights from neo-institutional theory and the comparative capitalism literature to the study of multinationals to develop a comparative institutional theory of CSR adoption. Drawing on the concept of stakeholder salience, this paper develops propositions how different forms of salience emerge in distinct institutional contexts and affect the CSR adoption by MNCs. Using data on labor rights CSR adoption by 629 European MNCs, our empirical results indicate that CSR complements home country institutions that grant formal stakeholder rights, but also substitutes for the absence of such institutions in host countries. Hence, our findings point to a potential paradox whereby CSR legitimates MNC behavior in both the presence and absence of institutionalized stakeholder rights.
... 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.
... 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.
... It can however be observed that scientific attention has gradually shifted from local and national perspectives to transnational and global perspectives (Fransen, 2013). Areas as diverse as environmental protection (see, e.g., Andonova & Tuta, 2014;Bartley & Smith, 2010;Bartley, 2007;Berliner & Prakash, 2013;Green, 2014;Mills & Koliba, 2015), climate change (Andonova et al., 2009;Betsill & Bulkeley, 2004;Bulkeley et al., 2014;Hickmann, 2015;Termeer, Dewulf, & Breeman, 2013), labour (see, e.g., Kay, 2005;Bartley, 2007;Fransen, 2011), accounting (see, e.g., Mattli & Büthe, 2005), health care (see, e.g., Jarman, 2014;Hönke & Thauer, 2014), human rights (see, e.g., Kobrin, 2009), and education (see, e.g., Bhanji, 2012) are likely to be subject to co-governance. ...
... While this does not reflect regulation as such, it can be argued that in more coordinated market economies we find a higher level of regulation than in liberal market economies. Finally, Berliner and Prakash (2013) find that greater control of corruption, and therefore more stringent economic regulation, has a positive impact on the uptake of environmental management systems. Contrasting these findings, Koos (2012a) shows that depending on the institutional complementarity of welfare and corporatist institutions, civic engagement can both substitute and complement public authority. ...
This article addresses co-governance which can be defined as a dynamic interaction between public and private actors to secure the provision of common goods. Which types of relationship between public and private actors exist? Do the forms of co-governance change over time? When is the relationship between public and private actors cooperative, when is it competitive, and when do we witness conflictual relationships? These research questions lie at the heart of this introductory article, which seeks to shed further light on the origins and impacts of the various co-governance patterns. By reviewing the body of research on this topic, we show that different relationships between public and private actors exist, and that the forms of co-governance can also change over time. While the dominant form of co-governance is cooperation, one can also observe instances of competition or even conflict between public and private actors. Most importantly, we find that both public and private actors are ready to reclaim competences in areas where they perceive the other actor to have gained too much influence. As we discuss in this article, the degree of cooperation and competition mostly depends on the existing regulatory arrangements, the congruence of goals of the different actor groups, and the institutionalization of industrial relations. These insights help us to better understand the role co-governance can play in addressing complex public problems.
... 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.
... 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.
... 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.
... 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.
... Even if the average respondent believes that Haitian charities are corrupt and therefore less worthy of her support, this works in favor of our theoretical claim about voluntary programs as signals of trustworthiness. Prior research suggests that the signaling benefits of voluntary programs are stronger if the actor/organization joining the program is located in corrupt countries (Berliner and Prakash 2013;Montiel et al. 2012). Membership in a voluntary program allows actors to purge ...
When making charitable donations, individuals would like to have some assurance that their resources will be used appropriately, but they do not necessarily have the time to research charities thoroughly. Charities have thus joined voluntary regulatory programs to signal trustworthiness and good governance. We conduct a survey experiment to explore if individual donors in the United States are more willing to give to a charity participating in a voluntary regulatory program. Because voluntary programs vary in their institutional design, we further test whether the provision of third-party auditing (to ensure that charities abide by program rules and obligations) enhances donor confidence in the voluntary program. Finally, we explore whether individuals seek to circumvent information problems by donating to local charities as opposed to overseas charities. We find that charity membership in a voluntary program does not influence people’s willingness to donate significantly, but that location of operations is significant.
... For instance, Berliner and Prakash (2013) demonstrate that firms from corrupted countries adopt voluntary stringent environmental practices that go beyond the minimum requirements of the home or the host country laws, as they face discrimination from non-governmental organizations (NGOs), investors and potential business partners. ...
This paper examines the role that multinational enterprises (MNEs) and foreign direct investments (FDI) can have in enhancing the access to electricity for local communities in developing countries based on the quality of home and host institutions. Access to electricity is a marker for development but it is far from being universal in developing countries. The shortage of electricity is mainly the consequence of inability of governments in planning, financing, and developing necessary electricity infrastructure. In this context, investments from other actors can be essential. Particularly, we focus on the role of FDI and MNEs. We claim that when MNEs invest in developing countries, they are incentivized to solve the lack of electricity infrastructure mainly for two reasons: to guarantee their business activities and to gain legitimacy with their local stakeholders. In addition, we argue that MNEs and FDI from institutionally underdeveloped countries will be more prone to develop infrastructure for the provision of electricity to local population, as generally they suffer from a negative stereotype. For this study, we rely on 1,547 observations composed of pairs of 83 home countries and 15 host countries in sub-Saharan Africa, observed from 2005 to 2011. Due to the nature of the database, we adopt panel data techniques, i.e., system-GMM and corrected Least Square Dummy Variable estimators. We find that FDI promotes access to electricity in developing countries with weak institutions and this is more likely true when FDI come from institutionally underdeveloped countries. These results are far from obvious, as they controvert common idea among institutional scholars that a regulatory authority is essential in the provision of infrastructure.
In conclusion, with this paper we partially rehabilitate the image of MNEs investing in developing countries, by demonstrating that—under certain conditions—they could contribute to energy poverty alleviation of local population.
Key words
FDIMNEelectricity infrastructureinstitutionsAfrica
... Arguably, given the perceptions of regulatory laxity in non-OECD countries, voluntary programs have greater opportunities to enhance the credibility of participants in these countries (Börzel and Risse 2010) by "purging" the negative association with the country of operation (Berliner and Prakash 2013 ). Non-OECD countries often have strong laws, but their regulatory efforts tend to be marked by poor monitoring and sanctioning. ...
Nonprofits seek to enhance their reputation for responsible management by joining voluntary regulation mechanisms such as accountability clubs. Because external stakeholders cannot fully observe nonprofits’ compliance with club obligations, clubs incorporate mechanisms to monitor compliance and impose sanctions. Yet including monitoring and sanctioning mechanisms increases the cost of club membership for nonprofits. What factors account for the variation in the strength of monitoring and sanctioning mechanisms in voluntary accountability clubs? An analysis of 224 clubs suggests that stringent monitoring and sanctioning mechanisms are more likely in fund-raising-focused clubs, clubs that offer certification (as opposed to only outlining a code of conduct), and clubs with greater longevity. The macro context in which clubs function also shapes their institutional design: clubs in OECD countries and clubs with global membership are less likely to incorporate monitoring and sanctioning mechanisms than clubs in non-OECD countries and single-country clubs, respectively.
... In particular, researchers have focused their analyses on the impact ISO 14001 has on environmental outcomes-performances (Testa et al. 2014;Zivkovic et al. 2013;Zobel 2013;Comogli, Serena 2012;Boiral, Henri 2012;Franchetti 2011;Gomez, Rodriguez 2011) and the identification of internal and external factors that impact upon the process of continuous improvement in companies (Brouwer 2004;Ratcliffe 2000;Ejdys, Matuszak-Flejszman 2010;Neugebauer 2012;Kim et al. 2013). Several studies mention variables that moderate the relationship between an independent variable (ISO 14001 implementation) and a dependent variable (environmental or business performance) (De Jong et al. 2014;Berliner, Prakash 2013;De Vries et al. 2012). ...
The practice of using environmental management systems (EMS) ISO 14001 at the organisational level indicates that the efficacy of such solutions depends on many factors, both endogenous and exogenous in nature. This article aims to identify the fac- tors that determine the opportunities for the improvement of EMS in organisations, the analysis of the relationship between the factors and the classification of the factors due to their role in the system improvement. The structural analysis was used to classify and identify the key factors and then to categorize these factors into five groups. Finally, the role of these key factors in improving environmental management systems was exam- ined. Based on the findings, guidelines can be offered to both scholars and practitioners regarding the factors crucial for the improvement of the EMS. Aiming to add value to the existing literature, the structural analysis was adapted to classification and identification of the key factors. From the point of view of practitioners, it seems to be very profitable to concentrate on the crucial factors during the process of EMS improvement.
... 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.
... A significant body of literature explores why companies adopt these programs (e.g. Campbell 2007;Marx 2008;King & Toffel 2009;Berliner & Prakash 2013), but less is known about the conditions under which they actually adhere to the espoused norms. ...
Transnational business regulation is increasingly implemented through private voluntary programs – such as certification regimes and codes of conduct – that diffuse global standards. However, little is known about the conditions under which companies adhere to these standards. We conduct one of the first large-scale comparative studies to determine which international, domestic, civil society, and market institutions promote supply chain factories' adherence to the global labor standards embodied in codes of conduct imposed by multinational buyers. We find that suppliers are more likely to adhere when they are embedded in states that participate actively in the International Labour Organization treaty regime and that have stringent domestic labor law and high levels of press freedom. We further demonstrate that suppliers perform better when they serve buyers located in countries where consumers are wealthy and socially conscious. These findings suggest the importance of overlapping state, civil society, and market governance regimes to meaningful transnational regulation.
... 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.
... 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.
... 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.
... These well established companies can invest in planning and execution of GSCM strategies however the inevitable task of greening the SC is a quite cumbersome and expensive for many of the small and medium companies (Lee et al., 2012). Especially, the situations of lower scale companies are much more difficult in case of developing countries, where cutting down the cost is the major motivational drive (with lack of total cost perspective including sustainability), no stringent rules and regulations, lack of customers' awareness on the environmental impact by their choice of product/service, corruption and other unethical practices (Berliner and Prakash, 2013). ...
In the present scenario, achieving the green capability has become one of the typical features that is pitching hard along the explorations and transitions of the manufacturing supply chains. Since the ceremonious, common and static solutions do not help to transform the dynamic natured manufacturing supply chains into green manufacturing supply chains. This is mainly due to the increased complexity (of manufacturing supply chains) outpacing the advancement achieved. Hence, there must be a process geared up to identify and prioritise the significant areas to focus and dynamically adjust the targets for continuous improvement to achieve green capability. To address these issues, the current study proposes a methodology consisting of five phases to institute the directions for achieving green capability and it is integrated with a benchmarking approach to provide the basis for continuous improvement. In order to present its utility, it is deployed in an Indian manufacturing company.
... • 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.
... Contrary to the traditional command and control approach (e.g. EU environmental Directives and Regulations, national environmental laws encompassing orders, permits, licensing), the voluntary adoption of standardized EMSs is often considered as a selfregulatory mechanism (Berliner and Prakash, 2013;Potoski and Prakash, 2005;Prakash and Potoski, 2006;Hillary and Thorsen, 1999;Christmann andTaylor, 2001, 2006). This self-regulatory mechanism is generally associated with the certification process through external auditing, which essentially concerns the two main certifiable EMSs standards. ...
The adoption of Environmental Management Systems standards such as ISO 14001 and EMAS has gained substantial momentum in the last decade. Nevertheless, the heterogeneous dissemination of these standards across various geographic areas and sectors of activities raises questions about their raison d’être and underlying motivations. Although the main drivers and impacts of standards to adopt Environmental Management Systems, as well as their dissemination have been widely analyzed in the literature, the diffusion of these environmental certifications according to the environmental impact of their sectors has been overlooked. As a contribution to fulfill this gap, this article aims at analyzing the diffusion of EMAS across various sectors of activity of the European Union's member states, depending on their environmental impact. More specifically, the paper analyzes (1) whether there is a higher density of environmental certifications in sectors with the greatest impact on the environment (i.e. high polluting industries), (2) if this certification intensity is homogeneous between European member states. Among other issues, the findings confirm that the intensity of environmental certifications is higher in sectors with the greatest environmental impact, although those intensities are significantly different from one member state to another. The implications for public policy makers as well as for other stakeholders are discussed.
... 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. ...
... In previous work (Berliner and Prakash 2013), we argued that domestic regulatory institutions would condition the country-level diffusion of ISO 14001 certification via global trade and foreign investment linkages. This paper builds on that previous work both empirically and theoretically. ...
How might domestic regulatory institutions influence the adoption of global private regimes? We focus on the ISO 9001 and 14001 certification standards, which obligate firms to establish quality and environmental management systems. Previous research highlights the roles of international commercial audiences and national regulatory pressures as unconditional drivers of adoption. However, we argue that domestic regulatory institutions condition their effects—in opposite directions. Where regulatory institutions function well, firms facing high levels of regulatory pressure are more likely to seek ISO certification, but firms facing pressures from international audiences are less likely to do so. In contrast, weak regulatory institutions make export-oriented and foreign-owned firms more likely to seek ISO certification, but render firms facing high levels of regulatory pressure less likely to do so. We find support for our claims using firm-level data from 10,000 firms in 30 countries in Eastern Europe and Central Asia.
... 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.
... 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). ...
... 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.
... 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”.
Building state capacity has often been hailed as a cure-all for the ailments of the developing world and has been linked to human rights improvements, economic development, and the enforcement of property rights. Low state capacity, on the other hand, has been viewed as one of the primary impediments to improvements of labor rights and other social justice issues. We examine the relationship between state capacity and the protection of labor rights in panels of 85 developing countries, and 34 "supply-chain-relevant" countries. We find that changes in state capacity are only associated with changes in labor rights in countries where workers' interests are better represented in the political system - measured alternately as left party power, democracy, union density, and potential labor power. Our findings highlight the importance of combinations of state capacity and political will in leading to improved rights of workers in global supply chains.
The aim of this paper is to analyze, through a literature review, the implementation of several management systems (MSs) and their sustainable management. Three main scenarios and their outcomes are analyzed. In the first, organizations implement management systems but do not certify them, explaining the decertification phenomenon. In the second, organizations implement management systems and certify them. Organizations in the above scenarios contribute to the MSs diffusion phenomenon. In the third, organizations may or may not implement additional management systems, but they do internalize their requirements. Organizations in this scenario may decide to improve their efficiency by using the requirements of the standards for their internal benefits regardless of their certification or even to manage their MSs by implementing an integrated management system. Both internal and external motivations to implement and manage these MSs will also be analyzed, as will the correlations among them and each scenario. Due to the strong impact of ISO 9001 and ISO 14001 on organizations worldwide, the existing literature has focused on the implementation of these MS standards. Therefore, the analysis presented in this chapter will primarily consider these standards, although some attention will be paid to other MSs. The main contribution of this study is the presentation of three possible scenarios that standardization bodies, organizations and academia should consider for the future study of MSs.
Voluntary programs have emerged as important instruments of public policy. We explore whether programs lacking monitoring and enforcement mechanisms can curb participants’ shirking with program obligations. Incentive-based approaches to policy see monitoring and enforcement as essential to curb shirking, while norm-based approaches view social mechanisms such as norms and learning as sufficient to serve this purpose. The United Nations Global Compact (UNGC), a prominent international voluntary program, encourages firms to adopt socially responsible policies. Its program design, however, relies primarily on norms and learning to mitigate shirking. Using a panel of roughly 3,000 U.S. firms from 2000 to 2010, and multiple approaches to address endogeneity and selection issues, we examine the effects of Compact membership on members’ human rights and environmental performance. We find that members fare worse than nonmembers on costly and fundamental performance dimensions, while showing improvements only in more superficial dimensions. Exploiting the lack of monitoring and enforcement, UNGC members are able to shirk: enjoying goodwill benefits of program membership without making costly changes to their human rights and environmental practices.
Over the last 30 years, the U.S. states has retreated from its regulatory responsibility over private-sector economic activities. Over the same period, a celebratory literature, mostly in political science, has developed, characterizing the current period as the rise of the regulatory state or regulatory capitalism. The notion of regulation in this literature, however, is a perverse one—one in which regulators mostly advise rather than direct, and industry and firm self-regulation is the norm. As a result, new and potentially dangerous technologies such as fracking or mortgage backed derivatives are left unregulated, and older necessary regulations such as prohibitions are weakened. This article provides a joint criticism of the celebratory literature and the deregulation reality, and strongly advocates for a new sociology of regulation that both recognizes and documents these failures.
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.
Research over the past decade has made considerable progress toward achieving a holistic understanding of the myriad actors, interests, and relationships shaping labor rights in global supply chains, but numerous obstacles remain to building a more cumulative research program. In this essay we outline two major challenges and several fruitful directions forward. First, we review the different outcomes of interest in research on labor rights and highlight several tensions that lead to difficulty comparing findings across studies, inappropriate data choices, and unexamined causal assumptions. Second, we highlight a failure to adequately integrate the findings of research in two different subliteratures, one focusing on the incentives of states and firms to adopt reforms, and a second focusing on the implementation of those reforms with monitoring and enforcement mechanisms. We conclude by highlighting the important questions raised by a clearer integration of these two literatures and identifying several recent studies that begin to answer them.
Nonprofits and nongovernmental organizations (nonprofits, in short) have emerged as important actors across a wide range of policy areas. Along with their contribution to economic growth and democracy (Putnam, 1993), some view them as the key pillars of the emerging world society (Meyer 1997) and world culture. Given their policy potential and the policy hype that has often surrounded them, nonprofits have attracted significant levels of resources from governments, intergovernmental organizations, foundations, citizens, and corporations. The expectations for what nonprofits can accomplish are quite high, especially given the inadequate success of both market-based and government-based approaches in solving pressing policy problems. This increased policy attention and the attendant rise in resource flows to the “third sector” have also led to increased scrutiny. Both practitioners and scholars have raised questions about the lack of appropriate accountability mechanisms to govern nonprofits: if nonprofits are showered with resources, how do we know whether nonprofits are delivering as promised? Nonprofits, as well as the donors that seek to fund them, have sought to address these accountability demands in several ways. This volume examined one important category of accountability mechanisms: voluntary accountability clubs. Theoretically and empirically, this volume explored issues such as how and why such clubs emerge, why nonprofits are willing to participate in voluntary programs that impose costly obligations, who sponsors these programs, and how participation in such clubs might reassure various principals about nonprofits' intentions regarding accountability and governance issues.
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.
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.
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.
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.
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.
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.
Voluntary environmental programs (VEP) are institutions that encourage participating actors to produce environmental public goods beyond the requirements of government law. Drawing on the club approach to the study of VEPs, we identify four collective action challenges facing VEPs. First, sponsoring actors must be motivated to invest resources to create a VEP despite incentives to free ride on the efforts of others. Second, VEPs need to be designed in ways to offer firms sufficient excludable incentive to join them. Third, VEPs need monitoring and enforcement mechanisms to ensure that participants adhere to program obligations and not free ride on efforts of other participants. Fourth, VEPs and their sponsors need to motivate stakeholders to pay firms for producing environmental public goods. The literature reveals considerable variability in how these challenges are addressed, suggesting that successful VEPs need to fit their institutional contexts . Expected final online publication date for the Annua...
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.
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 study analyzes the initial implementation of the Sustainable Slopes Program a voluntary environmental initiative established by the U.S. National Ski Areas Association in partnership with federal and state government agencies. Our findings indicate that participation of western ski areas in the Sustainable Slopes Program is related to institutional pressures in the form of enhanced federal oversight and higher state environmental demands exerted by state agencies, local environmental groups and public opinion. The analysis also suggests that, despite these institutional pressures, participant ski areas appear to be correlated with lower third-party environmental performance ratings. This behavior seems to reflect the lack of specific institutional mechanisms to prevent opportunism in the current design of the Sustainable Slopes Program. That is, the program does not involve specific environmental standards, lacks third-party oversight, and does not have sanctions for poor performance.
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.
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.
Competition to attract foreign direct investment (FDI) creates opportunities for multinational enterprises (MNEs) to diffuse corporate management practices from their countries-of-origin (home countries) to countries hosting their foreign operations. We examine conditions under which MNEs transfer corporate environmental practices from home countries to host countries. Our focus is on ISO 14001, the most widely adopted voluntary environmental program in the world. We examine inward FDI stocks and ISO 14001 adoption levels for a panel of 98 countries, and a subset of 74 developing countries, for the period 1996–2002. We find support for the country-of-origin argument in that inward FDI stocks are associated with higher levels of ISO 14001 adoption in host countries only when FDI originates from home countries that themselves have high levels of ISO 14001 adoption. Countries’ ISO adoption levels are associated not with how much FDI host countries receive overall but from whom they receive it. Three implications emerge from this study: (1) FDI can become an instrument to perpetuate divergence in corporate practices across the world; (2) economic integration via FDI can create incentives for firms to ratchet up their environmental practices beyond the legal requirements of their host countries; (3) instead of racing down to match the less stringent corporate practices prevalent in developing countries, developed countries can employ FDI outflows to ratchet up corporate practices abroad given that developing countries are net recipients of developed countries’ FDI outflows.