The Effect of Sustainability Standard Uncertainty on Certification Decisions of Firms in Emerging Economies
40 Pages Posted: 26 Feb 2018
Date Written: February 26, 2018
Firms are frequently pressured by customers to obtain certification to one or more voluntary sustainability standards. However, uncertainty associated with competing voluntary sustainability standards can reduce the value of standard certifications and jeopardize the entire voluntary regulatory system, especially in emerging economies. In this article we first identify three distinct sources of voluntary standard uncertainty: (i) diversity of customer requirements, (ii) dynamism of customer requirements, and (iii) the unpredictability of the future evolution of standard to then demonstrate empirically how all the three sustainability standard uncertainty sources negatively impact the likelihood adoption of food safety standards among 97 Mexican food exporting firms. We discuss ethical implications and offer recommendations for both, customers and suppliers, as well as standard-setting organizations.
Keywords: certification; emerging economies; global governance; voluntary sustainability standards; sustainability standard uncertainty
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