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Does eco-certification boost regulatory compliance in developing countries? ISO 14001 in Mexico

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  • Allen Blackman
Abstract
Private sector initiatives certifying that producers of goods and services adhere to defined environmental process standards are increasingly popular worldwide. According to proponents, they can circumvent chronic barriers to effective public sector environmental regulation in developing countries. But eco-certification programs will have limited effects on producers’ environmental performance if, as one would expect, they select for those already meeting certification standards. Rigorous evaluations of the environmental effects of eco-certification in developing countries that control for selection bias are rare. We use plant-level data on more than 80,000 Mexican facilities to determine whether ISO 14001 series certification of environmental management systems boosts regulatory compliance. We use propensity score matching to control for nonrandom selection into the program. We find that plants recently fined by environmental regulators were more likely to be certified, all other things equal, but that certified plants were subsequently fined just as often as similar uncertified plants. These results suggest that in Mexico, the ISO 14001 program attracts dirty plants under pressure from regulators—not just relatively clean ones—but does not have a large, lasting impact on their regulatory compliance. Copyright Springer Science+Business Media, LLC 2012

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  • Allen Blackman, 2012. "Does eco-certification boost regulatory compliance in developing countries? ISO 14001 in Mexico," Journal of Regulatory Economics, Springer, vol. 42(3), pages 242-263, December.
    • Handle: RePEc:kap:regeco:v:42:y:2012:i:3:p:242-263
    DOI: 10.1007/s11149-012-9199-y
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    16. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
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    18. Blackman, Allen & Guerrero, Santiago, 2012. "What drives voluntary eco-certification in Mexico?," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 256-268.
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    Citations

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    Cited by:

    1. Chakraborti, Lopamudra, 2020. "Regulator Reputation Effects in Developing Countries: Evidence from the Toxics Pollution Registry of Mexico," MPRA Paper 104580, University Library of Munich, Germany.
    2. Xu, Peng & Xu, Xiaomei & Bai, Guiyu, 2022. "Corporate environmental responsibility, CEO’s tenure and innovation legitimacy: Evidence from Chinese listed companies," Technology in Society, Elsevier, vol. 70(C).
    3. Sarah L. Stafford, 2016. "Environmental management systems and compliance at small and lightly regulated facilities: evidence from the New Hampshire hazardous waste program," Journal of Regulatory Economics, Springer, vol. 49(3), pages 292-314, June.
    4. Amit Kumar Gupta & Narain Gupta, 2021. "Environment Practices Mediating the Environmental Compliance and firm Performance: An Institutional Theory Perspective from Emerging Economies," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 22(3), pages 157-178, September.
    5. Li, Rui & Fang, Debin & Xu, Jiajun, 2024. "Does China's carbon inclusion policy promote household carbon emissions reduction? Theoretical mechanisms and empirical evidence," Energy Economics, Elsevier, vol. 132(C).
    6. Turaga, Rama Mohana R. & Gupta, Vishal, 2018. "Adoption of ISO 14001 Standards in Indian Manufacturing Firms," Other publications TiSEM 2750d6f4-b509-4cde-a237-8, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Voluntary environmental regulation; Duration analysis; Propensity score matching; Mexico; Q56; Q58; O13; O54; C41;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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