Abstract
Environmental management standards (EMS) are important voluntary management tools that aim at reducing the environmental impact of firms’ activities. From ethical motivations through increasingly high pressure from regulatory authorities to expected financial returns, reasons to adopt an EMS are manifold. While they all certainly matter, it is still unclear from the literature which firm-specific organisational capabilities and structural characteristics significantly drive adoption. Using Propensity Score Matching (PSM) on two samples of French firms, we identify firm-specific factors associated with the early or late adoption of ISO 14001-type EMS and we test whether adoption increases labour productivity. We find that adopters are moderately large manufacturing firms that rely on ISO 9001 standards or Total Quality Management. In addition, according to the first sample, early adopters tend to be more technologically complex firms that are active in the European market. These differences are attenuated in the second sample, which may be biased towards more innovative firms. Both samples however concur with the conclusion that, whether early or late, adoption is associated with a higher labour productivity compared to non-adoption. This result still holds when we use fully interacted linear models instead of PSM, and seems to be consistent over time. Thus, implementing EMS might provide win–win opportunities to adopters, without giving any premium to “early birds”.
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Notes
Available online at www.iso.org.
These 11 points are described in ISO 14001:2015 Environmental Management Systems, Requirements with Guidance for Use, Available at http://www.iso.org/iso/catalogue_detail?csnumber=60857.
A significant part of the questionnaire is addressed only to innovative firms.
We are aware that, since EMS are generally adopted on a voluntary basis, they are not a treatment in the fully conventional sense of the term. However, this is not a major issue in our investigation, since we are less interested in estimating a pure causal impact of EMS on productivity than in determining whether adoption is associated with a higher productivity, controlling inasmuch as possible for endogeneity biases.
In a nutshell, the kernel estimator attributes weights to control observations according to their relative proximity to the treated observation. Good matches get a large weight and poor matches get a small weight.
We implemented FILM using the FILM module for Stata proposed by Leuven and Sianesi (2004) and available at http://www.ifs.org.uk/publications/2712.
In COI 2006, 11 firms reported an EMS in 2003 but not in 2006, which probably correspond to mistakes in the reporting. We treated them as outliers and thought they were best left out of the sample. This problem did not occur in CIS 2008, thanks to the structure of the dedicated question.
Estimating a Logit rather than a Probit specification did not qualitatively affect our results.
In our estimations, we express size in thousands of employees in order to avoid a scaling problem.
In the CIS 2008 sample, the existence of a measure of R&D intensity for the year 2008 allows us to test an alternative specification of the Probit model for late adopters only.
http://www.oecd.org/sti/ind/48350231.pdf at the time of this writing.
Although the coefficient associated with late adoption is slightly higher than the one associated with early adoption, its standard error is higher too, so confidence intervals overlap and one can only conclude that both early and late adoptions have a positive effect of a similar magnitude.
Available at www.iso.org.
This series is publicly Available at https://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV.
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Acknowledgements
The authors thank Vivien Procher and Heather Berry for their helpful and constructive comments on a previous version of this manuscript, presented at the DRUID 20th Anniversary Conference in Copenhagen (Denmark), on June 14th 2016. We also thank our Editor in charge, Prof. Barry Bozeman, and an anonymous referee for their helpful comments on previous versions of the manuscript and for their suggestions for improvement. All remaining errors are of course our owns.
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Ozusaglam, S., Robin, S. & Wong, C.Y. Early and late adopters of ISO 14001-type standards: revisiting the role of firm characteristics and capabilities. J Technol Transf 43, 1318–1345 (2018). https://doi.org/10.1007/s10961-017-9560-5
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DOI: https://doi.org/10.1007/s10961-017-9560-5
Keywords
- Environmental management standards
- Early and late adoption of environmental standards
- Labour productivity