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Does ISO14001 raise firms' awareness of environmental protection? The case of Vietnam

Published online by Cambridge University Press:  08 November 2018

Bin Ni ,
Hanae Tamechika ,
Tsunehiro Otsuki  and
Keiichiro Honda
Bin Ni*
Affiliation:
Department of International Economics, Faculty of Economics, Hosei University, Tokyo, Japan
Hanae Tamechika
Affiliation:
Graduate School of Economics, Nagoya City University, Nagoya, Japan
Tsunehiro Otsuki
Affiliation:
Osaka School of International Public Policy, Osaka University, Osaka, Japan
Keiichiro Honda
Affiliation:
Faculty of Administrative Studies, Prefectural University of Kumamoto, Kumamoto, Japan
*
*Corresponding author. E-mail: jiadaniel@hotmail.com
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Abstract

Environmental protection is an issue that all developing countries must cope with when inviting foreign direct investment (FDI). However, the high correlation between FDI and pollution does not necessarily indicate that foreign firms are to blame. In this study, we apply firm-level panel data from Vietnam and unique information on waste discharge to demonstrate that foreign firms are actually more proactive in acquiring ISO14001 certification. ISO14001 is a voluntary environmental standard, the adoption of which improves a firm's performance in terms of waste control, and increases its welfare and productivity level. This study provides robust evidence that firms' efforts toward corporate social responsibility eventually benefit them as well.

Keywords

Environmental protectionFDIISO14001Vietnam

JEL classification

Q56: Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth F21: International Investment • Long-Term Capital Movements D22: Firm Behavior: Empirical Analysis F64: Environment
Type
Research Article
Information
Environment and Development Economics , Volume 24 , Issue 1 , February 2019 , pp. 47 - 66
Copyright
Copyright © Cambridge University Press 2018 

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