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The Diffusion of Voluntary Environmental Programs: The Case of ISO 14001 in Korea, 1996–2011

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Abstract

This paper examines the adoption of ISO 14001, which is known as the most famous voluntary environmental program. The data of this paper pertain to Korean [Throughout this paper, Korea refers to the Republic of Korea (South Korea)] firms in manufacturing industries from 1996 to 2011. Event-history modeling to examine firms’ adoption of ISO 14001 finds that both resource-based factors and institutional factors have influenced the diffusion of ISO 14001 in Korea. By exploring time-related effects, I also find that while resource-based factors are important in the early periods of the diffusion, institutional factors become important in the later periods of the diffusion. This confirms the findings of previous studies that a firm’s motivation to adopt organizational policies varies according to different diffusion periods. The paper concludes with a brief discussion of what this study tells us about the institutional context of ISO 14001 in Korea and Asia more broadly.

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Notes

  1. Visit the website (http://green.kocham.net) to access detail information about green markets in Korea.

  2. The fee for ISO 14001 certification ranges from $50,000 for small facilities to more than $200,000 for larger facilities.

  3. PACEFIS is a voluntary law, and it is not legally binding.

  4. The information about VEPs eligible for the governmental incentives is available at the web of Korea Accreditation Board (www.kab.or.kr).

  5. The amount of subsidies differs in administrative regions. “Gyeonggi-do” was the first local government which began to offer subsidies for small–medium firms seeking VEPs. This local ordinance has spread across Korean local governments since 2000. As of 2011, 11 out of 16 local governments provide subsidies with small–medium firms seeking management programs including ISO 14001.

  6. Some scholars criticize this two-stage institutionalization model because it conceptualizes institutional and technical forces as separate and distinct. They argue that technical considerations are also embedded in institutional forces. These scholars challenge this two-stage institutionalization model by assuming that institutional environments are fragmented and contested. In addition, the institutional environments are thought of as being influenced by multiple and competing logics. However, the history of Korean manufacturing industries is quite short, so that institutional environments are still immature. This condition coincides with Tolbert and Zucker’s assumption of institutional environments (newly forming organizational fields). Therefore, my analysis follows the two-stage model.

  7. The most recent data about the distribution of ISO 14001-certified facilities across industries in Korea were available for 2009.

  8. This is one of most representative financial newspapers in Korea.

  9. This variable should be time varying covariate, but KISVALUE provides the most recently updated status of firms. That is, KISVALUE does not provide old information about whether a firm was a small and medium firm. However, according to government reports, only four firms were promoted from small and medium firms to large firms between 1996 and 2010. Therefore, I believe that firm status is not time varying, and I use the most updated status as a time-constant covariate.

  10. I impute the measure for the relative size of export volume based on a year. Through this imputation process, 1536 observations have increased. Before and after the imputation process, the significance of independent variables also does not change.

  11. I tried another cut-off year. Studies in the diffusion of management practices categorize corporate participants into various groups according to the timing of each firm’s participation relative to the percentage of the total population that joined new programs (Rogers 2010). In particular, Rogers (2010) classifies the “early majority” as the first 50 percent of adopters. In my case, I use the 50-percent ISO 14001 adopter threshold to differentiate between early adopters and later ones. By 2008, 519 of 982 firms had adopted ISO 14001; those firms are classified as early adopters. On the other hand, 61 firms had adopted ISO 14001 between 2009 and 2011, and those firms are classified as later adopters. The analyses using alternative cut-off year also confirm that variables in RBV are significant to explain the adoption of ISO 14001 only in the early periods, as predicted Hypothesis 8. However, it does not capture the effect of institutional variables on the adoption of ISO 14001 in later periods well. These results might be affected by the fact that the later periods using alternative cut–off year do not include a sufficient number of events (i.e., ISO 14001 adoption) because it includes only three years of data.

  12. Many Asian countries have supported the growth of ISO 14001 through government support programs. These countries include: Japan, China, Korea, Taiwan, Hong Kong, Thailand, Malaysia, Singapore, Indonesia, Vietnam, and Sri Lanka.

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Acknowledgments

I would like to thank Erin L. Kelly for her input at different stages of this article. I also appreciate the comments and helpful suggestions of Elizabeth H. Boyle, David Knoke, Wesley Longhofer, Chares Demetriou, and other colleagues in the Department of Sociology at the University of Minnesota and the School of Sociology at the Higher School of Economics in Moscow.

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  1. Higher School of Economics, Moscow, Russian Federation

    Kyungmin Baek

  2. School of Sociology, Room #540, 20 Myanitskaya, Moscow, Russian Federation

    Kyungmin Baek

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Baek, K. The Diffusion of Voluntary Environmental Programs: The Case of ISO 14001 in Korea, 1996–2011. J Bus Ethics 145, 325–336 (2017). https://doi.org/10.1007/s10551-015-2846-3

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