The ISO 14001 Environmental Standard and Exports

ABSTRACT

Analyses that examine the role of international standards on export performance have been concentrated on quality certifications, like the ISO 9000. In this article, we assess the impact of environmental certifications on export outcomes. Using firm-level data from Ecuador, we found that holding an ISO 14001 environmental certification increases the likelihood of becoming an exporter. We did not find an impact on the firm’s level of exports or on the growth rate of exports. The results suggest that ISO 14001 certification is most useful when it comes to reducing information frictions, thus allowing firms to initiate export transactions.

KEYWORDS:

• Environmental certification
• exports

Acknowledgments

I would like to thank Mauricio Mesquita Moreira, Christian Volpe Martincus, Kun Li, Danielle Trachtenberg, and two anonymous referees for their helpful comments. Mayra Alejandra Ramirez provided excellent research assistance. The views and interpretations in this article are strictly those of the author and should not be attributed to the Inter-American Development Bank, its Board of Directors, or any of its member countries.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/08853908.2022.2155270

Notes

¹ We exclude the establishments in the service sectors. There are 123 industry sectors at the ISIC 4-digit level.

² Firm size, measured in terms of total employment, is set by INEC according to the following groups: small firms (less than 50 employees), medium size (between 50 and 200 employees), and large firms (more than 200 employees).

³ The variables comprising physical capital in the ENESEM are not consistently measured through the period of analysis. This prevents us from constructing other productivity measures, like total factor productivity.

⁴ This is a standard practice in the labor economics literature.

⁵ 4% = (0.31/8.1)*100.

⁶ The unconditional likelihood of becoming an exporter for large firms not holding an ISO 14001 certification is 8.3%. 5% = (0.41/8.3)*100.

⁷ The unconditional likelihood of becoming an exporter for firms in more pollution-intensive sectors not holding an ISO 14001 certification is 8.6%. 17% = (1.49/8.6)*100.

⁸ The unconditional likelihood of becoming an exporter for firms in less pollution-intensive sectors not holding an ISO 14001 certification is 8.1%. 5% = (0.39/8.1)*100.

⁹ To compute these shares, we exclude the ISO 14001 certifications granted to the service sectors.

¹⁰ The unconditional likelihood of becoming an exporter for firms in sectors with widespread ISO 14001 certifications granted globally is 10.7%. 4.6% = (0.497/10.7)*100.