Institute for Social, Behavioral, and Economic Research

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 in the country of adoption, impact positively on the adoption of ISO 14001 by chemical firms. Unlike previous studies that focused mostly on cross industry analyses, we do not find trade related factors significant while explaining adoption in the chemical industry. Our results differ, therefore from previous research and highlight the need to isolate industry effects to understand the diffusion of international standards.