Jun-Yi Shen, Xiang-Dong Qin

Abstract: Understanding why firms choose to implement voluntary environmental schemes in a large polluted country like China is important for both environmental economists and policy makers. In this paper, we utilize unique plant-level survey data of 270 Chinese firms in manufacturing industry to identify the key determinants of their decisions on certifying ISO 14001 environmental management standard and the Chinese Environmental Label. The empirical results exhibit that while there are a number of factors (e.g., ownership, firm size, target market, and the number of rivals) having similar effects on the certification decisions between the two examined programs, the unique factors that only affect the decision of certifying one program (i.e., ISO 14001 or the Chinese Environmental Label) are also observed.

Keywords: Voluntary Environmental Scheme, ISO 14001, Eco-Label, Chinese Firm

Cite this paper: nullJ. Shen and X. Qin, "What Determines Chinese Firms’ Decision on Implementing Voluntary Environmental Schemes?," Journal of Service Science and Management, Vol. 4 No. 3, 2011, pp. 380-390. doi: 10.4236/jssm.2011.43044.

References

[1]   I. Henriques and P. Sadorsky, “Environmental Manage- ment Systems and Practices: An International Perspec- tive,” In: N. Johnstone, Ed., Environmental Policy and Corporate Behavior, Edward Elgar Publishing, Northamp- ton, 2007, pp. 34-87.

[2]   ISO, “The Integrated Use of Management System Stan- dards,” International Standards Organization, 2008.

[3]   J. Shen and T. Saijo, “Does Energy Efficiency Label Alter Consumers’ Purchase Decision? A Latent Class Approach on Shanghai Data,” Journal of Environmental Management, Vol. 90, No. 11, 2009, pp. 3561-3573. doi:10.1016/j.jenvman.2009.06.010

[4]   R. Starkey, “Standardization of Environmental Manage- ment Systems: ISO 14001, ISO 14004 and EMAS,” In: R. Welford, Ed., Corporate Environmental Management 1: Systems and Strategies, 2nd Edition, Earthscan, London, 1998, pp. 61-89.

[5]   S. Arora and T. Cason, “An Experiment in Voluntary Environmental Regulation: Participation in EPA’s 33/50 Program,” Journal of Environmental Economics and Ma- nagement, Vol. 28, No. 3, 1995, pp. 271-286. doi:10.1006/jeem.1995.1018

[6]   W. B. Gray and M. E. Deily, “Compliance and Enforce- ment: Air Pollution Regulation in the US Steel Industry,” Journal of Environmental Economics and Management, Vol. 31, No. 1, 1996, pp. 96-111. doi:10.1006/jeem.1996.0034

[7]   E. Helland, “The Enforcement of Pollution Control Laws: Inspections, Violations, and Self-Reporting,” The Review of Economics and Statistics, Vol. 80, No. 1, 1998, pp. 141-153. doi:10.1162/003465398557249

[8]   S. Dasgupta, B. Laplante, N. Mamingi and H. Wang, “Inspections, Pollution Prices, and Environmental Perfor- mance: Evidence from China,” Ecological Economics, Vol. 36, No. 3, 2001, pp. 487-498. doi:10.1016/S0921-8009(00)00249-4

[9]   L. Gangadharan, “Environmental Compliance by Firms in the Manufacturing Sector in Mexico,” Ecological Econo- mics, Vol. 59, No. 4, 2006, pp. 477-486. doi:10.1016/j.ecolecon.2005.10.023

[10]   M. Khanna, “Non-Mandatory Approaches to Environmen- tal Protection,” Journal of Economic Surveys, Vol. 15, No. 3, 2001, pp. 291-324. doi:10.1111/1467-6419.00141

[11]   M. Nakamura, T. Takahashi and I. Vertinsky, “Why Japa- nese Firms Choose to Certify: A Study of Managerial Responses to Environmental Issues,” Journal of Environ- mental Economics and Management, Vol. 42, No. 1, 2001, pp. 23-52. doi:10.1006/jeem.2000.1148

[12]   S. B. Brunnermeier and M. A. Cohen, “Determinants of Environmental Innovation in US Manufacturing Indus- tries,” Journal of Environmental Economics and Manage- ment, Vol. 45, No. 2, 2003, pp. 278-293. doi:10.1016/S0095-0696(02)00058-X

[13]   H. Wang, N. Mamingi, B. Laplante and S. Dasgupta, “Incomplete Enforcement of Pollution Regulation: Bar- gaining Power of Chinese Factories,” Environmental and Resource Economics, Vol. 24, No. 3, 2003, pp. 245-262. doi:10.1023/A:1022936506398

[14]   S. J. DeCanio and W. E. Watkins, “Investment in Energy Efficiency: Do the Characteristics of Firms Matter?” The Review of Economics and Statistics, Vol. 80, No. 1, 1998, pp. 95-107. doi:10.1162/003465398557366

[15]   H. Wang and D. “Wheeler, Financial Incentives and Endogenous Enforcement in China’s Pollution Levy System,” Journal of Environmental Economics and Ma- nagement, Vol. 49, No. 1, 2005, pp. 174-196. doi:10.1016/j.jeem.2004.02.004

[16]   K. Fisher-Vanden, G. H. Jefferson, J. Ma and J. Xu, “Technology Development and Energy Productivity in China,” Energy Economics, Vol. 28, No. 5-6, 2006, pp. 690-705. doi:10.1016/j.eneco.2006.05.006

[17]   H. Wang and Y. Jin, “Industrial Ownership and Environ- mental Performance: Evidence from China,” Environ- mental and Resource Economics, Vol. 36, No. 3, 2007, pp. 255-273.

[18]   N. Mamingi, S. Dasgupta, B. Laplante and J. H. Hong, “Understanding Firms’ Environmental Performance: Does News Matter?” Environmental Economics and Policy Studies, Vol. 9, No. 2, 2008, pp. 67-79.

[19]   S. Gupta and B. Goldar, “Do Stock Markets Penalize Environment-Unfriendly Behaviour? Evidence from India,” Ecological Economics, Vol. 52, No. 1, 2005, pp. 81-95. doi:10.1016/j.ecolecon.2004.06.011

[20]   K. Elsayed and D. Paton, “The Impact of Environmental Performance on Firm Performance: Static and Dynamic Panel Data Evidence,” Structural Change and Economic Dynamics, Vol. 16, No. 3, 2005, pp. 395-412. doi:10.1016/j.strueco.2004.04.004

[21]   National Bureau of Statistics of China, “China Statistical Yearbook,” Beijing, 2007.