Recent isber_publications items

Eco- vs. productive efficiency: A new approach to effective and comparative performance analysis

Thu, 4 Mar 2010 00:00:00 +0000

Increasing social concerns over the environmental externalities associated with business activities are pushing firms to identify activities that create economic value with less environmental impact and to become more eco-efficient. However, this task has proven challenging because there is no systematic methodology to integrate undesirable outputs, such as emissions, in the calculation of economic or productive efficiency. In this paper, we develop a methodology based on the nonparametric frontier approach to measure corporate eco-efficiency, and to compare it to productive efficiency. Our eco-efficiency model rectifies several problems encountered in existing approaches. Our methodology allows us to calculate, for each firm, the reduction in emissions necessary to attain eco-efficiency. In addition, our methodology measures changes in efficiency attributed to undesirable outputs. We apply our methodology to data from 84 U.S. electric utilities in 2007. Our analysis demonstrates...

Survey Questionnaire on Environmental Management Practices: Summary of Results by Industry and practices

Sun, 28 Sep 2008 00:00:00 +0000

This document provides a summary of the results of a survey on Environmental Management Practices (EMP) conducted by the University of California at Santa Barbara during October and November 2003. The survey was sent to 3255 facilities in 8 industrial sectors: pulp, paper and paperboard mills, chemical and allied products, refining, primary metals, machinery, electronics /electrical, automotive, and utilities. The survey yielded 562 responses, which constitutes a 17.2% response rate. This summary includes a general description of the sample, a profile of the respondents, and summary statistics of facilities' environmental management practices, relations with stakeholders, and environmental performance measures. In addition, we report the factors that respondents noted were influencing them to improve their environmental performance and adopt particular environmental management practices. In many cases, these results are categorized by industry to facilitate comparisons.

The...

Eco-Labeling Strategies: The Eco-Premium Puzzle in the Wine Industry

Wed, 9 Jan 2008 00:00:00 +0000

Eco-labeling signals that a product has been eco-certified. While there is increasing use of eco-labeling practices, there is still little understanding of the conditions under which eco-labels can command price premiums. In this paper, we argue that the certification of environmental practices by a third party should be analyzed as a strategy distinct from although related to the advertisement of the eco-certification through a label posted on the product. By assessing eco-labeling and eco-certification strategies separately, we are able to identify benefits associated with the certification process independently from those associated with the actual label. More specifically, we argue in the context of the wine industry that eco-certification can provide benefits, such as improved reputation in the industry or increased product quality, which can lead to a price premium without the need to use the eco-label. We estimate this price premium of wine due to the eco-certification...

THE DIFFUSION OF VOLUNTARY INTERNATIONAL MANAGEMENT STANDARDS: RESPONSIBLE CARE, ISO 9000 and ISO 14001 IN THE CHEMICAL INDUSTRY

Mon, 24 Sep 2007 00:00:00 +0000

This paper analyzes the factors that explain the international diffusion of voluntary international management standards. We argue that to understand the diffusion of international standards we need to define a model that includes interactions between standards as well as interactions between standards and their institutional environment. We present two opposite views explaining how the previous diffusion of management standards facilitates or hampers the adoption of new management standards. We test a comprehensive model of diffusion of international environmental management standards within the chemical industry using a panel of 113 different countries during the period 2000 to 2003. Our results show that the previous experience of businesses in voluntary standards such as the Chemical Industry’s Responsible Care program or ISO 9000, government commitment towards Environmental Management Systems Standards, and the level of activity of international non-governmental organizations...

THE ADOPTION OF ISO 14001 WITHIN THE SUPPLY CHAIN: WHEN ARE CUSTOMER PRESSURES EFFECTIVE?

Tue, 11 Sep 2007 00:00:00 +0000

Voluntary programs are now widely used by governments and other actors to improve the environmental performance of firms beyond regulatory compliance. However, it is important to understand the effectiveness and limitations of these voluntary approaches. This paper investigates the rationale for firms to ‘comply’ with or ‘resist’ the mandate of their customers to adopt the international certified management standard (CMS) ISO 14001 in the North American automotive industry. We argue that the effectiveness of such a mandate will vary according to the characteristics of the relationship between suppliers and customers. We contrast and test hypotheses based on both transaction costs economics and signaling theories to suggest that both suppliers marked by a dependent relationship with their customers as well as those marked by a distant relationship with their customers have incentives to comply with the requests of their customers but through different mechanisms. Our results,...

Information Disclosure Policies: Evidence from the Electricity Industry

Mon, 13 Aug 2007 00:00:00 +0000

A "third wave" of environmental policy has recently emerged that emphasizes information provision as an integral part of the risk mitigation strategy. While theory suggests that information programs may correct market failures and improve welfare, the empirical effectiveness of these programs remains largely undetermined. We show that mandatory information disclosure programs in the electricity industry achieve stated policy goals. We find that the average proportion of fossil fuels decreases and the average proportion of clean fuels increases in response to disclosure programs. However, the programs also produce unintended consequences. Customer composition and pre-existing fuel mix significantly affect program response, suggesting that effective information disclosure policies may not be efficient.

AN INSTITUTIONAL PERSPECTIVE ON THE DIFFUSION OF INTERNATIONAL MANAGEMENT STANDARDS: THE CASE OF THE ENVIRONMENTAL MANAGEMENT STANDARD ISO 14001

Wed, 1 Aug 2007 00:00:00 +0000

This paper investigates the determinants of the early adoption of the international environmental management standard ISO 14001 using a panel of 84 countries from 1996 to 2002. It analyzes the relationship between firms’ decisions to adopt international management standards and institutional factors. The analysis emphasizes that, in the case of an emerging standard, the potential lack of consensus within the regulatory/institutional environment concerning the value of a new standard could send mixed signals to firms about the standard. The results show that in the early phase of adoption, regulative and normative forces within the institutional environment can work against each other. This study contributes to the institutional theory perspective by offering a more complex specification of the neo-institutional model where institutional forces can compete with each other.

Voluntary Agreements to Improve Environmental Quality: Are late joiners the free riders?

Wed, 1 Aug 2007 00:00:00 +0000

Within the context of environmental voluntary agreements (VAs), this paper analyzes how free riding affects the effectiveness of collective corporate political strategies that aim at shaping government policy. We demonstrate that substantive cooperative strategies are more likely to be pursued by firms that enter a VA at its initiation while free riding or symbolic cooperation is more likely to be adopted by late joiners. We demonstrate that late joiners and early joiners within VAs adopt different cooperative strategies because they face different institutional pressures. We also find that late joiners that cooperate only symbolically may endanger the overall effectiveness of a VA. Our analysis is based on the strategies of firms participating in the Climate Challenge Program established in 1995 by the U.S. Department of Energy (DOE) and the representatives of the national electric utilities to reduce greenhouse gas emissions.

DEREGULATION AND RESOURCE RECONFIGURATION IN THE ELECTRIC UTILITY INDUSTRY

Fri, 22 Apr 2005 00:00:00 +0000

This paper analyzes how economic deregulation impacts resource reconfiguration in the electric utility industry. We argue that to understand strategic change in this industry, we need to understand how development and deployment of a firm's resources reflects path dependencies that nonmarket actors impose on firms. We find evidence that the deregulation introduced to this historically staid industry has stimulated environmental differentiation strategies for incumbent firms. Consistent with theories that suggest differentiation is most likely to appear where its point of uniqueness is valued by customers, utilities engaged in differentiation if they served states whose populace exhibited a higher level of environmental sensitivity. The tendency for firms to differentiate is lessened if they are relatively more dependent on coal-fired generation or relatively more efficient. In both of these cases, the variables are associated with lower operating costs, in turn demonstrating...

FIRMS' CHOICE OF REGULATORY INSTRUMENTS TO REDUCE POLLUTION: A TRANSACTION COST APPROACH

Wed, 4 Jun 2003 00:00:00 +0000

This paper extends transaction costs economics to analyze relationships between firms and regulatory agencies. It compares the economic efficiency of firm-agency governance structures for dealing with pollution reduction. The transaction costs of three ideal type governance structures are analyzed: command and control regulation, market based mechanisms, and negotiated agreements. We propose that the choice of governance structure will depend on the strategies firms are pursuing given their transaction attributes and market opportunities.

IN SEARCH OF ISO: AN INSTITUTIONAL PERSPECTIVE ON THE ADOPTION OF INTERNATIONAL MANAGEMENT STANDARDS

Thu, 13 Mar 2003 00:00:00 +0000

This paper analyzes the determinants of the cross-national adoption of the international Environmental Management System standard ISO 14001 using a panel of 102 countries from 1996 to 2000. I use new institutional economics to develop hypotheses on the impact of the institutional environment on the cost of adopting the management standard. I also develop hypotheses using the institutional sociology perspective to address the role of the institutional environment in affecting demand and legitimation processes related to the standard. The results of the statistical analysis show that both rationales of cost minimization and legitimation play a role in the adoption of the standard. Using both theories improves our understanding of institutional forces affecting the early adoption of emerging management standards.

DEREGULATION PROCESS, GOVERNANCE STRUCTURES AND EFFICIENCY: THE U.S. ELECTRIC UTILITY SECTOR

Thu, 13 Mar 2003 00:00:00 +0000

This paper is an empirical assessment of the comparative efficiency of governance structures in an environment marked by high uncertainty. We analyze the short-term impact of retail deregulation on the productive efficiency of electric utilities in the United States. We argue that there are transitory costs linked to the process of deregulation. The business strategy literature suggests different governance structures to cope with uncertainty linked to changing regulatory environments. Transaction cost economics suggests that firms may reduce their exposure to the uncertainty created by the process of deregulation by adopting vertical integration strategies. Organizational scholars on the contrary argue that firms vertically disintegrate and adopt flexible governance structures to increase their adaptability to the new conditions. Our empirical analysis is based on 177 investor-owned electric utilities representing 83% of the total U.S. electricity production by utilities from...

Fighting Sweatshops: Problems of Enforcing Global Labor Standards

Thu, 20 Feb 2003 00:00:00 +0000

In this paper we address the question of how sweatshop production can be opposed, given the globalization of the apparel industry and the dominance of retailers in its commodity chain. After briefly reviewing conditions in the industry, we discuss the role that consumer pressure might play. We discuss three different, but potentially complementary, approaches: agreements between nations, codes of conduct and monitoring, and worker empowerment. We conclude with an analysis of the Workers’ Rights Consortium, a newly-created organization comprised of universities, students, and non-governmental organizations. We conclude that despite its limitations, a vibrant consumer-based movement is emerging which – when united with efforts to organize workers at the point of production – has the potential of reducing sweatshop production in this most globalized of industries.