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ID: 168192

Diffusion of ISO 14001 in a Developmental State: the case of Korea / Baek, Kyungmin ; Oh, Jeong Rok

Kyungmin Baek, Jeong Rok Oh	Journal Article
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Summary/Abstract

ISO 14001, the most common voluntary environmental program in the world, has in recent years been diffused worldwide. However, the level of this diffusion varies across geographical regions. This article analyzes the case of Korea to illustrate how national institutional environments in the East Asia and Pacific region led to the rapid diffusion of ISO 14001. We hypothesize that developmental states have a highly favorable national institutional arrangement for the deployment of ISO 14001. This study finds that developmental states where governments implement strong initiatives for national development and economic growth, exemplified by Korea, are active in implementing neoliberal practices such as ISO 14001.

Key Words

Developmental State ; ISO 14001 ; Case of Korea

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ID: 078844

Investing up: FDI and the cross-country Diffusion of ISO 14001 management systems / Prakash, Aseem; Potoski, Matthew

Prakash, Aseem	Journal Article
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2007.

Summary/Abstract

Competition to attract foreign direct investment (FDI) creates opportunities for multinational enterprises (MNEs) to diffuse corporate management practices from their countries-of-origin (home countries) to countries hosting their foreign operations. We examine conditions under which MNEs transfer corporate environmental practices from home countries to host countries. Our focus is on ISO 14001, the most widely adopted voluntary environmental program in the world. We examine inward FDI stocks and ISO 14001 adoption levels for a panel of 98 countries, and a subset of 74 developing countries, for the period 1996-2002. We find support for the country-of-origin argument in that inward FDI stocks are associated with higher levels of ISO 14001 adoption in host countries only when FDI originates from home countries that themselves have high levels of ISO 14001 adoption. Countries' ISO adoption levels are associated not with how much FDI host countries receive overall but from whom they receive it. Three implications emerge from this study: (1) FDI can become an instrument to perpetuate divergence in corporate practices across the world; (2) economic integration via FDI can create incentives for firms to ratchet up their environmental practices beyond the legal requirements of their host countries; (3) instead of racing down to match the less stringent corporate practices prevalent in developing countries, developed countries can employ FDI outflows to ratchet up corporate practices abroad given that developing countries are net recipients of developed countries' FDI outflows.

Key Words

FDI ; Foreign Direct Investment ; ISO 14001 ; International Standards Organization

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