What Drives Voluntary Eco-Certification in Mexico?

26 Pages Posted: 16 Apr 2010

See all articles by Allen Blackman

Allen Blackman

Inter-American Development Bank (IDB)

Santiago Guerrero

University of California, Berkeley - Agricultural and Resource Economics

Date Written: April 8, 2010

Abstract

Advocates claim that voluntary programs can help shore up poorly performing command-and-control environmental regulation in developing countries. Although literature on this issue is quite thin, research on voluntary environmental programs in industrialized countries suggests that they are often ineffective because they mainly attract relatively clean plants free-riding on prior pollution control investments. We use plant-level data on some 59,000 facilities to identify the drivers of participation in the ISO 14001 certification program in Mexico. We find that regulatory fines spur certification: on average, a fine roughly doubles the likelihood of certification for three years. Hence, the program attracts dirty firms and at least has the potential to improve environmental performance. We also find that plants that sold their goods in overseas markets, used imported inputs, were relatively large, and were in certain sectors and states were more likely to be certified.

Keywords: voluntary environmental regulation, duration analysis, Mexico

JEL Classification: Q56, Q58, O13, O54, C41

Suggested Citation

Blackman, Allen and Guerrero, Santiago, What Drives Voluntary Eco-Certification in Mexico? (April 8, 2010). Available at SSRN: https://ssrn.com/abstract=1586544 or http://dx.doi.org/10.2139/ssrn.1586544

Allen Blackman (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Santiago Guerrero

University of California, Berkeley - Agricultural and Resource Economics ( email )

Berkeley, CA 94720
United States

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