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An analysis of a panel of 140 countries from 1994 to 2004 shows that ISO 9000 certification levels are associated with increases in countries' bilateral exports, particularly for developing counties' exports. The ISO 9000 program is designed to reduce information asymmetries by providing assurance about the product quality of companies.

Debates about the efficacy of private environmental regimes have been fueled by disparate research findings, such as when the same regime that has been effective in one setting is found to be ineffective in another. In this article, we show that the efficacy of ISO 14001, the most widely adopted voluntary environmental regime in the world, is conditioned by the stringency of countries’ domestic regulations. In doing so, we outline a model of strategic corporate environmentalism wherein firms strategically focus their International Organization for Standardization (ISO) certification to reduce emissions of visible air pollutants as opposed to less visible water pollutants. Our analyses of pollution levels for a panel of 159 countries (73 for water pollution) from 1991 to 2005 indicate that ISO 14001 certifications reduce air (SO2) emissions in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. We also find that ISO membership levels are not associated with reductions in water pollution levels (Biochemical Oxygen Demand BOD), irrespective of stringency of domestic law. Our article suggests that the efficacy of global private environmental regimes is likely to be conditioned by the domestic regulatory context in which firms function, and given firm’s strategic considerations, this efficacy could vary across pollution types. [ABSTRACT FROM PUBLISHER]

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. [ABSTRACT FROM AUTHOR]

Voluntary environmental programs are codes of progressive environmental conduct that firms pledge to adopt. This paper investigates whether ISO 14001, a voluntary program with a weak sword—a weak monitoring and sanctioning mechanism—can mitigate shirking and improve participants' environmental performance. Sponsored by the International Organization for Standardization (ISO), ISO 14001 is the most widely adopted voluntary environmental program in the world. Our analysis of over 3,000 facilities regulated as major sources under the U.S. Clean Air Act suggests that ISO 14001-certified facilities reduce their pollution emissions more than non-certified facilities. This result persists even after controlling for facilities' emission and regulatory compliance histories as well as addressing potential endogeneity issues between facilities' environmental performance and their decisions to join ISO 14001. © 2005 by the Association for Public Policy Analysis and Management [ABSTRACT FROM AUTHOR]