bargaining and devolution in the upper guadiana basin increasingly central governments approach contentious natural resource allocation problems by devolving partial decision making responsibility to local stakeholders this paper conceptualizes devolution as a three stage process and uses a simulation model calibrated to real world conditions to analyze devolution in spain s upper guadiana basin the spanish national government has proposed spending over a billion euros to reverse a 30 year decline in groundwater levels we investigate how the government can most effectively allocate this money to improve water levels by utilizing its power to set the structure of a local negotiation process using a numerical nash model of local bargaining we find that if the national government creates appropriate incentives local bargaining can produce water stabilization the actual water levels that will emerge are highly dependent on the central government s decisions about the budget available to local stakeholders and the default policy which will be influenced by the relative value the government places on various financial and environmental outcomes our paper concludes by determining the relationship between these relative valuations and the government s preferences over water levels

does federalism matter political choice in a federal republic this paper builds upon some well known facts about state government to generate new conclusions about social choice on the national level of a federal republic citizens vote against national laws that restrict their state s ability to export costs but support laws that reduce the costs imposed on them individuals may seek to extend the laws passed in some states to the entire nation or may oppose preemptive laws because they benefit from variety since these motivations are absent in a unitary system national support for a law will depend upon whether a unitary or a federal structure prevails

promoting groundwater reform in the guadiana basin in many parts of the world there is a substantial disconnect between existing water institutions and the institutions needed to ensure sustainable water supplies for the future implementing large scale institutional change is politically challenging in many cases changes must emerge from political bargaining or negotiation accordingly there is substantial literature looking at applications of negotiation theory to water policy carraro marchiori and sgobbi 2007 review this literature in detail

how sustainable entrepreneurs engage in institutional change insights from biomass torrefaction in the netherlands sustainable entrepreneurship often requires a purposeful change to the existing business environment market regulations and societal norms and values institutions to ensure sustainable products and services become legitimate and competitive yet how sustainable entrepreneurs alter or create institutions remains unclear we employ a two year comparative case study with four entrepreneurs commercializing torrefied biomass in the netherlands consistent with insights from institutional entrepreneurship research findings show that sustainable entrepreneurs create new symbols theorize construct new measures build consensus and forge new relations to alter or create new institutions moreover we find that entrepreneurial collaboration in the form of a trade association has three feedback effects it creates accessible modes diversity of scope and an increased scale of institutional change strategies we conclude that future studies should further connect sustainable and institutional entrepreneurship research and take group and individual factors into account when explaining how sustainable entrepreneurs engage in institutional change

the determinants of an environmentally responsive firm an empirical approach abstract our empirical results indicate that a firm s formulation of an environmental plan is positively influenced by customer pressure shareholder pressure government regulatory pressure and neighborhood and community group pressure but negatively influenced by other lobby group pressure sources and a firm s sales to asset ratio firms which view environmental issues as important in the next 5 years are also more likely to have a plan relative to the manufacturing sector firms in the natural resource sector are more likely to formulate environmental plans while firms in the service sector are less likely to have plans our results provide insight into how firms react to environmental issues they also offer policymakers a list of determinants which can be used either as an alternative or complement to environmental regulation

a green energy plan for denmark several political regulation instruments such as co2 taxes have been suggested to implement co2 reduction policies but normally the cost of implementing co2 reduction policies is considered to be a threat to both economic growth and employment but to some extent strategies can be developed which implement co2 reduction goals by creating jobs and such strategies could help economic growth

can punishment generate specific deterrence without updating analysis of a stated choice scenario this study explores the specific deterrence generated by punishment in the context of regulatory violations with a focus on the distinction between upward revisions to future punishment parameters likelihood and severity and the experience of being penalized in order to avoid the pitfalls of empirically analyzing actual choices made by regulated entities e g measuring entities beliefs regarding the likelihood and size of future penalties our study examines behavior associated with a stated choice scenario presented within a survey distributed to the environmental managers of facilities regulated under the us clean water act this choice of respondents strengthens the external validity of our empirical results based on a variety of statistical methods our empirical results strongly and robustly reject the standard hypothesis that specific deterrence stems solely from upward revisions to punishment parameters while supporting the alternative hypothesis of experiential deterrence whereby facilities focus on recent experiences to shape their compliance behavior

stimulating different types of eco innovation in the uk government policies and firm motivations in this paper we adopt a recent oecd framework and examine the role of external policy tools and internal firm specific factors for stimulating three different types of eco innovations that range on a spectrum of lower to higher technological and environmental impacts end of pipeline pollution control technologies integrated cleaner production technologies and environmental r d using a novel firm level dataset from a defra survey we estimate a tobit model which provides empirical evidence showing that these eco innovations are motivated by different external policy tools and internal firm specific factors our findings indicate that end of pipeline technologies and integrated cleaner production technologies are mainly driven by equipment upgrade motives with a view of improving efficiency while environmental regulations are effective in stimulating the end of pipeline technologies and environmental r d interestingly alongside government induced regulations we find that market factors mainly motivated by cost savings are effective in driving environmental r d finally iso14001 certification is effective in strengthening the positive impact of environmental management systems on both end of pipeline technologies and environmental r d while csr policies have no significant impact on motivating any of the eco innovations

toward a theoretical model of voluntary overcompliance abstract we explain why some firms voluntarily overcomply with environmental regulation in our model all consumers value environmental quality but differ in their willingness to pay which depends on their income levels publicly available information on environmental performance of firms enables consumers to identify clean firms firms participate in a two stage duopoly game where they first choose their levels of cleaning technology and next engage in price competition the market gets segmented by income levels a minimum standard binding on the dirty firm has the effect of improving the performance of the cleaner firm a subsidy obtains the same competitive outcome

inequality and the territorial fragmentation of solidarity a long tradition of research has shown decentralized political struc tures as an important cause behind lower levels of redistribution and higher levels of inequality this article offers an alternative interpretation of the association between fragmented fiscal structures and higher levels of inequality i argue that the distribu tive effects of decentralization depend on the preexisting territorial patterns of inequal ity therefore the political choice between alternative fiscal structures is largely driven by their expected distributive consequences as a result the territorial structure of inequality becomes an important factor to explain why some fiscal structures are more integrated than others two mechanisms link regional income distributions and preferences about the decentralization of redistributive policy differences in the demand for redistribution associated with interregional income differences and dif ferences in the demand for social insurance associated with the incidence of labor market risks i test the argument using a data set of fourteen countries in the orga nization for economic cooperation and development oecd over the period 1980 2000 in addition i illustrate the potential of the approach by analyzing why social solidarity remains territorially fragmented in the european union despite the fact that it has a common currency and a common market

vertical irmbalance in the fiscal systems of federal states a theory of vertical fiscal imbalance in federal states vfi is developed which distinguishes between long run and short run imbalances and between normative and positive interpretations of the concept the analysis is carried out in the context of a simple three sector model where the allocation of national output among sectors results from interaction of a public choice process with an overall resource constraint the paper proposes welfare theoretic definitions of long run and short run vfi in addition it uses the concept as part of a positive analysis in order to reassess broad trends in canadian fiscal history

erratum standards versus standards the effects of different pollution restrictions when economists refer to pollution standards they almost universally mean uniform restrictions on pollution emissions e g william j baumol and wallace e oates 1975 ch 13 susan rose ackerman 1973 david besanko 1978 however in practice standards take many forms not only emissions restrictions but restrictions on pollution per unit of output or per unit of an input restrictions on the use of a polluting input or mandated use of a particular pollution control technology these specifications of regulations will have a variety of effects on a firm s resource allocation decisions for instance allowing pollution per unit of output as the standard instead of directly restricting the level of pollution gives the firm some choice in addition to reducing pollution it can increase its output to dilute the pollution this paper examines the effects of five different forms of pollution standards on input decisions the level of production and firm profits the results show that the different standards by providing firms with different incentives change the firm s allocation decisions and affect the relative profitability of the standards section i reviews the existing literature on the incentives of different instruments the following section describes the model to be used five different forms of pollution constraints are individually examined in section iii using a graphical approach their relative effects as well as some special cases are assessed in section iv finally section v raises the case of different standards when firms are not identical

why do manufacturing facilities introduce environmental management systems improving and or signaling performance abstract in this paper we explore the motivation for the introduction of environmental management systems and their certification a distinction is drawn between their role in bringing about better compliance or improved performance and as external indicators of good environmental practices to both other market participants and regulatory authorities drawing upon a database of approximately 4000 facilities in seven oecd countries empirical evidence is found for the role that both factors play in encouraging the adoption and certification of ems s but that the relative importance of different factors varies according to facility size

drivers of corporate environmentalism the case of the polish economy in transition abstract at the beginning of the 1990s the central and eastern european cee countries went through significant changes that were supposed to mould them into liberal market democracies those changes that took place in the legal institutional market and civil society fields have also significantly affected the sphere of environmental protection and management clark and cole 1998 as a result also corporate behaviour towards the natural environment has changed significantly apart from changes determined explicitly by legal developments poland has witnessed a rapid increase in voluntary corporate initiatives protecting the natural environment such as iso 14001 environmental management systems ems the purpose of this study is to uncover the drivers of corporate environmentalism as well as its specificity and dynamics during the transition period in poland in order to reach this goal 283 polish based companies were surveyed the conducted study showed that they tended to go green in order to improve their environmental performance and meet the ever changing environmental regulations expecting to capitalise on this type of corporate activity the latter was reflected in the corporate expectation to enhance their image surprisingly the research revealed that the importance of strictly economic drivers such as cost reduction and the market share was rather minor the findings also show that the pressure from various stakeholder groups was of little importance

utility consistent discrete continuous choices in soil conservation a utility consistent model of participation and participation intensity choices for a voluntary soil conservation program is developed a modified form of roy s identity is used to derive a two equation system that links the discrete dichotomous choice participation and the continuous choice intensity to the same utility function the model corrects for selectivity bias that arises in single equation approaches an application to a filter strip program in two counties in illinois and michigan demonstrates that different factors affect responses to the program across the sample regions estimated willingness to accept payments for participation in the program suggest policy impacts are not uniform across locations

assessing participation in voluntary environmental programmes in the developing world the role of fdi and export orientation on iso14001 adoption in thailand empirical assessments of the determinants of firm participation in voluntary environmental programmes veps in the developing world are largely absent from the environmental regulation literature leaving a number of important factors unique to such countries unexplored this article examines these factors namely the roles played by foreign direct investment fdi and export orientation in addition to factors deemed important in the industrialized world context to the problem of iso14001 adoption in one developing nation thailand we make use of unique primary data from 494 firms and focus on three important industries the resource based food and beverages industry the labour intensive textiles and wearing apparel industry and the more high technology electronics and electrical appliances industry we find that fdi plays a role in iso14001 adoption especially fdi from organization for economic co operation and development oecd and iso14001 rich countries other important determinants include fi

sustainable development in practice abstract the semi annual european environment sustainable conference in aalborg denmark brought together from primarily europe but also other parts of the world the conference focused on sustainability but one panel focused on practical applications for public policy and private industry the papers from this panel are presented in this special issue of the journal they cover topics ranging from corporate sustainable programs to government plans including feed in laws some papers are more academic oriented but clearly derived from practical political experiences such as those of the california energy crisis these theories argue the need for agile energy systems whereby regions cities and communities must have combinations of on site or distributed energy generation like combined heat and power cph along with central grid power generation finally there is a clear message in all the papers that market forces alone do not develop monitor or even provide level playing fields for communities in short there needs to be continuous government or public involvement in the sustainable communities

effects of local legitimacy on certification decisions to global and national csr standards by multinational subsidiaries and domestic firms we explore the impact of local legitimacy on the imitation of certification by subsidiaries of foreign multinational enterprises and domestic firms we propose that mne multinational enterprise subsidiaries and domestic firms differ in their propensity to imitate geographically proximate firms when deciding whether to adopt national vs global csr corporate social responsibility certifications for two reasons first there are differences in the legitimacy they can expect to gain in different communities from adopting these certifications second there are differences in their knowledge about the local legitimacy of these certifications we test our hypotheses by studying the decisions of automotive suppliers in mexico to certify either to iso 14001 a global certification or to clean industry a national certification we find that geography matters mne subsidiaries imitate national certifications by geographically proximate firms to overcome a liability of foreignness while domestic firms imitate global certifications by proximate firms to overcome the disadvantages of localness we explore the implications of our findings for institutional theory and future research

what determines the decision to implement emas a european firm level study empirical research on the characteristics of environmentally responsive companies has focussed on us and japanese companies for europe which is commonly considered as the greenest of the three major markets similar research is lacking this paper seeks to fill this gap by empirically investigating business and financial characteristics stakeholder pressures and public policies to distinguish companies that have implemented the european eco management and audit system emas from a unique firm level dataset of european publicly quoted companies we find that the emas participation decision is positively influenced by the solvency ratio the share of non current liabilities the average labour cost and the absolute company size as well as the relative size of a company compared to its sector average the profit margin exerts a negative influence we further find that companies whose headquarters is located in a country that actively encourages emas have a higher probability of participation finally this paper suggests that rather than attracting other kinds of companies a favourable institutional context succeeds in convincing more of the same kind of companies to participate

quality leadership when regulatory standards are forthcoming in many markets governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them such quality leadership strategies often win public acclaim especially when they involve environmental attributes using a duopoly model of vertical product differentiation we show that if the high quality firm can commit to a quality level before regulations are promulgated it induces the regulator to weaken standards and welfare falls our results raise doubts about the social benefits of corporate self regulation and highlight the dangers of lengthy delays between legislative mandates for new regulations and their implementation

using benefit cost criteria for settling federalism disputes an application to food safety regulation federalism disputes arising from state regulations particularly those pursuing health safety and environmental goals are common in the u s political system discussion of bases for settling such disputes often focuses on the in and out state incidence of benefits and costs but incidence is a complex concept that has not been systematically analyzed we discuss five dimensions important to evaluating incidence and present benefit cost spillover criteria for judging federalism disputes when applied to a massachusetts regulation of alar residues in heat processed apple products the criteria reach different conclusions on its appropriateness highlighting key considerations in evaluating state regulation in a federal system

some evidence on the effect of the separation of spending and taxing decisions it is often argued that separation of public spending and taxing decisions engenders in the voter overoptimistic hopes that someone else will bear the cost of public services thereby inducing an increase in the size of government but are perceived tax prices systematically and persistently reduced by separation although in stock markets all agents expectations may be unbiased they may or may not be unbiased in political markets this paper analyzes the separation created in federal states when the central government finances local expenditures evidence from a dynamic decisive voter model is presented that indicates that the separation introduced by federal grants to canadian provinces did in fact reduce the perceived tax price of provincial public services and raise provincial expenditures the results suggest also that the effect of separation diminished over time

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

are more innovative firms less vulnerable to new environmental regulation compliance with pollution limits and standards requires firms to implement adaptation processes that are not only costly themselves but also affect future profits in as much as they modify production systems and methods this paper attempts to respond to the question of how technological knowledge moderates the effect that the implementation of a new environmental regulation has on the results of affected firms the regulation selected for this study is the integrated pollution prevention and control act ippc a multivariate regression model mvrm has been applied to the regulatory event the most important implication of this paper is that technological knowledge prepares a firm for adapting to a greater environmental demand such as may be derived from a new regulation

voluntary environmental agreements good or bad news for environmental protection abstract there has been growing interest in the use of voluntary agreements vas as an environmental policy tool this article uses a simple model to determine whether vas are likely to lead to efficient environmental protection we consider cases where polluters are induced to participate either by a background threat of mandatory controls the stick approach or by cost sharing subsidies the carrot approach the results suggest that the overall impact on environmental quality could be positive or negative depending on a number of factors including the allocation of bargaining power the magnitude of the background threat and the social cost of funds

program enrollment and acreage response to reforestation cost sharing programs five alternative sets of predictions are presented of the total acreage of southern pine that would have been planted after clear cut harvest if existing government forest improvement programs had made different levels of cost sharing available to nonindustrial private forest owners the predictions illustrate the importance of separating and accounting for both the number of tracts enrolled and for the size of enrolled tracts predictions are obtained from a profit maximization model that represents the owner s decision as a simultaneous choice of reforestation practice and size of tract to harvest and reforest

epa s voluntary 33 50 program impact on toxic releases and economic performance of firms abstract this paper examines the motivations for participation in the voluntary 33 50 program and the program s impact on the toxic releases and economic performance of firms in the u s chemical industry it demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation after controlling for sample selection bias and the impact of other firm specific characteristics this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991 93 the program also had a statistically significant negative impact on the current return on investment of firms but its impact on the expected long run profitability of firms was positive and statistically significant

what triggers environmental management and innovation empirical evidence for germany abstract it is frequently hypothesized that environmental management systems emss may improve firms environmental innovation performance whether this hypothesis is true is as critical for environmental policy as questions pertaining to the relevant incentives for 1 a firm s voluntary adoption of an ems and 2 its environmental innovation behavior based on ample empirical evidence for german manufacturing this paper addresses the simultaneity of these issues on the basis of a recursive bivariate probit model that explores the hypothesis that a facility s decision on innovation activities is correlated with the decision on ems adoption our empirical results indicating that environmental innovation activities are not associated with ems implementation nor any other single policy instrument reflect the perceptions of the survey respondents and hence should be interpreted as correlations rather than causal relationships according to these perceptions innovation behavior seems to be mainly correlated with the stringency of environmental policy

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

incentive payments to encourage farmer adoption of water quality protection practices farmers can be encouraged to voluntarily adopt environmentally sound management practices through the use of incentive payments this paper uses both a bivariate probit with sample selection model and a double hurdle model on data from a survey of farmers to predict farmer adoption of the practices as a function of the payment offer the five management practices addressed here are integrated pest management legume crediting manure testing split applications of nitrogen and soil moisture testing also estimated are models that predict the acreage on which these practices would be applied given the decision to accept the incentive payments estimated

investment in energy efficiency do the characteristics of firms matter the literature on energy efficiency provides numerous examples of apparently profitable technologies that are not universally adopted yet according to the standard neoclassical theory of investment profit maximizing firms should undertake all investments with a positive net present value the standard theory also holds that the discount rate for computing the present value of a project should be the return available on other projects in the same risk class and therefore should not depend on characteristics of the firm this model as applied to energy saving investments is tested by examining whether firms characteristics influence their decision to join the environmental protection agency s voluntary green lights program a discrete choice regression is estimated over a large sample of participating and nonparticipating firms missing values in the data matrix are replaced with multiple imputations from a distribution estimated using the expectation maximization algorithm the results show that 1 sub

why japanese firms choose to certify a study of managerial responses to environmental issues abstract this paper examines empirically the determinants that led large japanese manufacturers to 1 incorporate environmental goals in their decisions 2 obtain environmental certification iso 14001 and 3 become early adopters of environmental certification we estimate two sets of models 1 models based on a profit maximization assumption and 2 models which incorporate utility maximization arguments recognizing that managers values attitudes and beliefs may also influence firms decisions the empirical analysis suggests that while the costs and benefits of voluntary actions to enhance or protect the environment and the capacity to act are significant determinants of voluntary environmental commitment so are the environmental values beliefs and attitudes of managers

effect of corporate economic performance on firm level environmental performance in a transition economy this paper analyzes the effect of corporate economic performance as measured by value added on firm level environmental performance in a transition economy in particular it analyzes this economic performance effect using an unbalanced panel of czech firms for the years 1995 1998 it assesses whether successful economic performance begets or undermines good environmental performance this connection seems especially important in transition economies since firms are dramatically restructuring their economic management approaches during transitional periods a majority of the analytical results indicate that successful economic performance undermines good environmental performance possibly indicating that more focused managerial efforts to improve economic outcomes may distract efforts to manage environmental matters better

sustainable farm income in the presence of soil erosion an agricultural hartwick rule soil erosion is a physical and economic problem of natural capital degradation even along an intertemporally efficient trajectory one can have in a loss of soil fertility and a continuous decline of agricultural net revenue moreover soil erosion is a major source of surface water pollution in rural areas erosion control is thus a challenge for sustainable resource management and internalizing external effects to sustain the level of farm income an agricultural hartwick rule is proposed which addresses both on farm and off farm effects of soil erosion first it requires the investment of the soil rents into alternative capital second additional measures are required to comply with an ambient quality target a charge subsidy scheme proves the most adequate from a perspective of cost effectiveness and sustainability if effluent charge revenues are earmarked to subsidize cropland retirement at the watershed scale in combination with the investment of soil rents this enables to maintain the level of farm income constant over time while respecting the ambient quality target altogether this fulfills the requirements of efficiency and sustainability 2003 elsevier science b v all rights reserved

determinants of proactive environmental management practices in indian firms an empirical study abstract the present study aims to empirically determine the primary factors that have a major influence on adoption of environmental management practices in indian firms for this purpose a theoretical framework has been proposed based on previous studies and a pilot survey that provides broad and specific variables that might have an impact of these practices this impact has been investigated by conducting factor analysis and stepwise regression analysis in order to collect the primary data a questionnaire has been designed for which 104 valid responses 8 5 response rate have been obtained the study reveals that internal holder ship and employees and market commercial buyers and suppliers of goods and services pressures are the significant drivers who govern the adoption of proactive environmental management practices however the external pressures from regulatory and societal stakeholders were not found to be important in the indian context the analysis further showed that firm s characteristic also play a significant role in defining the positive behavior of firms as large firms are more proactively engaged in environmental management initiatives moreover firms in the manufacturing chemical and agriculture sector are likely to have more comprehensive environmental management practices compared to the service sector

evolution and spontaneous uniformity evidence from the evolution of the limited liability company we examine whether the unguided state by state evolution of limited liability company statutes has led to efficient interstate uniformity our evidence suggests significant uniformity has been produced in cases where the net benefits of uniformity are positive and that such uniformity has not been produced by herd behavior our results are consistent with alchian s intuition about the role of market processes and suggests that the survival of efficient rules fostered by the rational behavior of decentralized economic actors are produced by forces beyond the control or foresight of individual lawmakers or legislatures

toxics release information a policy tool for environmental protection abstract this study examines investor reactions to the repeated public disclosure of environmental information about firms in the chemical industry and the effectiveness of this information as a decentralized mechanism for deterring their pollution by allowing investors to benchmark the performance of firms repeated provision of the toxics release inventory led firms to incur statistically significant negative stock market returns during the one day period following the disclosure of that information in the years 1990 1994 these losses had a significant negative impact on subsequent on site toxic releases and a significant positive impact on wastes transferred off site but their impact on total toxic wastes generated by these firms is negligible

dealing with uncertainties when governing csr policies as corporate social responsibility involves a voluntary business endeavour to address social and environmental issues beyond legal compliance governments cannot fall back on hierarchical command and control policies to support it as such it is complementary with the increasing popularity of public policies known as new governance policies where the government is engaged in a horizontal inter organizational network of societal actors and where public policy is both formed and executed by the interacting and voluntary efforts from a multitude of stakeholders however such policies are known to generate substantive uncertainty about the content of csr and its related issues strategic uncertainty regarding the behavior of the actors involved and institutional uncertainty related to the interaction process involved in the institutional change we explore new governance policy instruments to address these uncertainties in the context csr and discuss the experiences with these methods in the european union

in search of environmental spillovers there is an extensive literature that examines the relationship between foreign direct investment fdi and the productivity and competitiveness of domestic firms using estimation techniques from the productivity spillover literature this paper tests for the presence of environmental spillovers from foreign firms on the basis that foreign owned firms may encourage firms in their extended supply chain to improve their environment related management practices evidence for the existence of environmental spillovers should be easier to find than productivity spillovers where firms naturally attempt to minimise intra industry knowledge leakage in this paper we show that first foreign owned firms are more likely to implement environmental management systems ems and second that the presence of foreign owned firms in those sectors that a firm supplies can encourage good environmental practice this is especially true if a firm is foreign has high absorptive capacity and operates in the presence of formal and informal networks

what determines the inclusion in a sustainability stock index a panel data analysis for european companies this paper examines the determinants of the inclusion of european companies in the dow jones sustainability world index and the dow jones stoxx sustainability index in doing so the paper contributes to the micro econometric literature analyzing the determinants and economic effects of sustainability performance in three respects first it examines a broad measure of corporate sustainability behavior and thus does not only apply narrow measures of environmental performance such as toxic releases which is common in other studies second the paper examines the effect of internal assessment processes regarding corporate sustainability performance by an independent financial service institution finally it analyzes the influence of unobserved heterogeneity in the framework of panel data models the analysis shows that the probability for an inclusion in the sustainability indexes strongly decreases if a company does not respond to the written survey of the assessing institution furthermore time invariant random effects and an autoregressive structure in the stochastic components are important factors in contrast a significant influence of past economic performance cannot be confirmed robustly

evaluation of mexico s 1975 2000 energy plan the certainty and trustworthiness of a planning model can best be assessed when projections can be compared with actual developments the ability to design scenarios and to evaluate demographic economic and technological change is also increased with periodic comparisons between plans and actual facts in 1976 the mexican government published a 25 year power supply plan for the country in which a development of non fossil fuel plants was recommended largely due to environmental considerations it was proposed that the new demand should be met mainly with renewable energy sources and nuclear power the study stated that hydrocarbons would reach a peak between 2003 and 2005 and that after this point the descent of fuel consumption would proceed at an increased velocity under this program the dependence of mexico on fuel for electricity would be gradually reduced as the 21st century progressed the suggestion was not assumed by successive governments and fossil fuel plants took the place of the proposed nuclear plants however the original 25 years power plan has proved to be quite accurate in its social and economic previsions and allows the validation of a new more powerful and reliable planning model this paper presents the results of the validation of the model as well as major considerations to be heeded in the future to increase certainty in further planning efforts the projection of a better more sustainable and reliable energy future is also proposed

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

self regulation taxation and public voluntary environmental agreements an increasingly popular instrument for solving environmental problems is the public voluntary agreement va in which government offers technical assistance and positive publicity to firms that reach certain environmental goals prior papers treat such agreements as a superior low cost instrument that can be used to preempt a threat of traditional inefficient regulation we present a more general model in which public vas may instead be weak tools used when political opposition makes environmental taxes infeasible we explore the conditions under which taxes public vas and unilateral industry actions are to be expected and the welfare implications of the various instruments notably we also show that welfare may be reduced by the introduction of public vas 2002 elsevier b v all rights reserved

identifying the determinants of the decision to create socially responsible funds an empirical investigation this paper proposes an empirical assessment of the main factors behind the decision of a corporate sponsor to launch a socially responsible sr fund our analysis is performed on a database that encompasses 414 sr fund creations by 46 corporate sponsors between 1990 and 2012 we provide evidence that economic and human resources slack leverage low media coverage and high extra financial performance of the corporate sponsor contribute to an increase of the probability to propose sr funds these results lead us to argue that the introduction of such funds goes beyond the economic objective of enlarging the market share of the corporate sponsor it may thus be seen as a particular strategy in terms of communication and signaling due to the specific characteristics of sr funds

efficiency gains within firms under voluntary environmental initiatives this paper focuses on efficiency gains that voluntary environmental initiatives may achieve within the firm current debate concerning the extent and significance of inefficiencies within firms is critically important to the progress of energy and environmental policies several recent lines of inquiry in microeconomics help explain the persistence of inefficiencies within firms in addition two of the most prominent new approaches in the field of business strategy resource based strategy and the capabilities perspective focus on the heterogeneity among firms and the resulting pockets of inefficiency within firms they suggest at least three generic strategies for voluntary environmental initiatives challenging outdated organizational routines creating opportunities for differentiation or complementing firms resource investment trajectories these generic approaches suggest that there is considerable scope for further experimentation with voluntary environmental initiatives

protecting the environment when costs and benefits are privately known in this survey i analyze different approaches for protecting the environment when stakeholders are privately informed about the costs and benefits of pollution reduction the presence of asymmetric information calls for some important departures from the textbook prescriptions of marketable permits and emission taxes for controlling pollution for instance it may no longer be optimal to equate the social marginal benefits to the marginal cost of cleanup in determining appropriate abatement levels i conclude this review with some suggestions for future research in this area

the sustainability of anaerobic digestion plants a win win strategy for public and private bodies abstract energy production from the anaerobic digestion of organic waste is widely recognized as a social and environmental opportunity since it allows reducing waste disposal and making waste management economically profitable however profitability of these plants is strongly affected by the quantity and the quality of wastes as well as by the availability of local subsidies the key role of incentive policies in the economic success of investments in biomass to energy plants is highly recognised and has led european union eu governments to promote the deployment of these plants incentive policies adopted in eu countries differ significantly in this paper an evaluation model based on cost benefit analysis is developed in order to identify the production based incentive rates making investments in anaerobic digestion plant economically feasible without reducing social and environmental positive impacts the model has been applied to the case of energy production plants from anaerobic digestion of cattle manure in order to investigate the influence of the plant size on the investment profitability different waste collection areas have been considered environmental performances of the plants have been evaluated by adopting a life cycle assessment approach results obtained confirm the environmental benefits achievable through the energy production from the anaerobic digestion of cattle manure however the current production based incentive rates provided in most eu countries revealed an inadequate balance between private and public interest since they make profitable the investments only in case of small plants

can neoclassical economics underpin the reform of centrally planned economies te here s a curious symmetry between the arguments propounded over the last century in advocacy of socialism and the present popular discussion of the reform of centrally planned economies in those old discussions the vision of socialism was utopian which was contrasted with the dickensian realities of capitalism now the disasters of central planning are contrasted with the benefits flowing from perfectly functioning markets in the conventional wisdom of reform the vision of markets is utopian and that of central planning concentrates on the awful reality what is largely missing in the conventional wisdom is a satisfactory attempt to come to grips with the central question that should be answered in formulating reform plans how does one explain the differences in performance of market capitalist and centrally planned economies of course capitalism has outperformed central planning the developed west is therefore an obvious source of ideas for reforms but the institutions of capitalism come in many varieties and cannot be put in place instantaneously there are many alternative reform paths depending upon the importance attributed to each of these institutions thus there remains the problem of tracing the source of the superiority of capitalist economies to specific characteristics this point was made clear to me on hearing a vietnamese official justify single party rule by noting the economic success of taiwan and singapore reformers need a filter that interprets the experience of capitalist and socialist systems this is exactly where economic theory plays a vital role

adoption of pollution prevention techniques the role of management systems and regulatory pressures this paper investigates the extent to which firm level technological change that reduces unregulated emissions is driven by regulatory pressures and firms technological and organizational capabilities using a treatment effects model with panel data for a sample of s p 500 firms over the period 1994 1996 we find that organizational change in the form of total quality environmental management leads firms to adopt pollution prevention practices after controlling for the effects of various regulatory pressures and firm specific characteristics we find that the threat of anticipated regulations and the presence of complementary assets is important for creating the incentives and an internal capacity to undertake incremental adoption of pollution prevention techniques

contract design for the purchase of environmental goods from agriculture an environmental stewardship program whereby farmers are paid directly for the environmental goods they provide is developed by combining the microparameter distribution model with mechanism design principles the program overcomes the information asymmetry between farmers and governments and accounts for the deadweight losses from distortionary taxes the characteristics of optimal input and payment schedules of the program are derived these optimal schedules are determined by the tradeoffs between farming profits environmental benefits and deadweight losses from taxes and are second best except under restrictive conditions on deadweight losses from taxes and on the marginal product of inputs and marginal pollution costs

exploring new ways of assessing the effect of regulation on environmental management abstract studies indicate that while a variety of factors positively influence voluntary environmental management regulatory pressures are among the most important however most research examines samples representing large manufacturers or single industries essentially assuming a level of regulatory constraint using a sample of heterogeneous facilities this study finds that facilities can be classified according to the level of regulatory constraint and that group membership impacts the choice of environmental management strategy when assessed within a utility maximization framework more extensively regulated facilities implement more individual environmental management practices but participate in fewer formal voluntary environmental programs veps compared to other facilities

state government purchases in a federalist economy this paper empirically examines the impact of state government purchasing preference laws on expenditures and revenue of individual states purchasing preferences allow firms located within a state to win state contracts without being the low bidder we find that states with purchasing preference laws spend 3 more in real terms per capita than other states evidence is found indicating that the preferences require revenue increases to fund them the tax base does not rise sufficiently and that there is some apparent taxpayer resistance to these preferences this evidence is consistent with a coalition model of state government behavior because it indicates there is significant redistribution of income between groups within the state

the economics of a public fund for environmental amenities a study of crp contracts the problem of targeting crp purchases to buy environmental amenities under productivity and environmental heterogeneity is considered gini coefficients and lorenz curves are used to measure the effectiveness of spending under alternative targeting criteria the environmental benefits considered are water erosion wind erosion surface water quality and wildlife habitat the three alternative targeting criteria examined include purchasing land according to i the benefit to cost ratio ii the level of benefits and iii the level of cost results indicate that the degree of variability and correlation determine the extent to which suboptimal targeting achieves a significant portion of available environmental benefits

a signaling model of environmental overcompliance abstract we present a theory of unilateral regulatory overcompliance as a signaling device firms that have a competitive advantage in the use of a cleaner but more costly technology overcomply in order to signal to an imperfectly informed benevolent government that compliance costs are low thereby triggering tougher regulation we identify the conditions under which such an overcompliance signaling equilibrium arises showing that there may be over overcompliance in that firms may overcomply even when tougher regulation is not socially desirable we also discuss the differential implications of the signaling theory as compared to other theories of unilateral regulatory overcompliance

voluntary export restraints antidumping procedure and domestic politics a voluntary export restraint ver is preferred to a tariff by a government concerned about electoral returns when the influence of industry profits is large relative to the losses to consumers from higher prices if the foreign firm is uncertain of these pressures the antidumping code facilitates the complete transfer of the relevant information and generates a ver rather than a tariff in equilibrium the choice across instruments is determined by the political attributes domestic and foreign profits rise with the antidumping generated ver and the ver lowers the volume of trade by more than the expected duty copyright 1996 by american economic association

environmental information provision market valuation and firm incentives an empirical study of the japanese prtr system the environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets previous studies using tobin s q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response which may mislead conclusions to overcome this problem we simultaneously estimate the functions of the intangible asset the replacement cost and the toxic chemical risk we find that the japanese financial market does not value risk associated with toxic chemical releases nevertheless even without market valuation firms increase investment to reduce pollution 2010 by the board of regents of the university of wisconsin system