Eco-label Adoption in an Interdependent World
AbstractThe growing popularity of national efforts to promote eco-labeling raises important questions. In particular, developing countries fear that the eco-label can deliberately impose the environmental concern of (high income) importing countries on their production methods. Yet, empirical studies of the adoption of eco-labelling schemes at the cross-country level are scarce due to the lack of data availability. In this paper, the decision to introduce an eco-label is analyzed through a heteroskedastic Bayesian spatial probit, which allows the government’s decision to introduce an eco-label to be influenced by the behaviour of the neighbouring countries. The estimation is performed by extending the joint updating approach proposed by Holmes & Held (2006) to a spatial framework. Empirical evidence highlights the importance of a high stage of development, innovation experience and potential scale effects in the implementation of an eco-label scheme. In addition, results confirm the existence of a strategic interdependence in the eco-label decision.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by IRENE Institute of Economic Research in its series IRENE Working Papers with number 10-01.
Length: 43 pages
Date of creation: Jan 2010
Date of revision:
Bayesian Spatial Probit; International Trade; Environmental Policy; Eco-labelling;
Other versions of this item:
- F18 - International Economics - - Trade - - - Trade and Environment
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-04-17 (Agricultural Economics)
- NEP-ALL-2010-04-17 (All new papers)
- NEP-ENV-2010-04-17 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mario F. Teisl & Brian Roe & Alan S. Levy, 1999. "Ecocertification: Why It May Not Be a “Field of Dreams”," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1066-1071.
- repec:ebl:ecbull:v:17:y:2008:i:3:p:1-11 is not listed on IDEAS
- Stephen K. Swallow & Roger A. Sedjo, 2000. "Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment," Land Economics, University of Wisconsin Press, vol. 76(1), pages 28-36.
- Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
- G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor and Francis Journals, vol. 13(1), pages 53-62, March.
- Mads Greaker, 2006. "Eco-labels, Trade and Protectionism," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 33(1), pages 1-37, 01.
- Eugene Beaulieu & James Gaisford, 2002. "Labour and Environmental Standards: The 'Lemons Problem' in International Trade Policy," The World Economy, Wiley Blackwell, vol. 25(1), pages 59-78, 01.
- Kurt J. Beron & James C. Murdoch & Wim P. M. Vijverberg, 2003. "Why Cooperate? Public Goods, Economic Power, and the Montreal Protocol," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 286-297, May.
- Daniel Melser & Peter E. Robertson, 2005. "Eco-labelling and the Trade-Environment Debate," The World Economy, Wiley Blackwell, vol. 28(1), pages 49-62, 01.
- Roger A. Sedjo & Stephen K. Swallow, 2002. "Voluntary Eco-Labeling and the Price Premium," Land Economics, University of Wisconsin Press, vol. 78(2), pages 272-284.
- Mattoo, Aaditya & Singh, Harsha V, 1994. "Eco-labelling: Policy Considerations," Kyklos, Wiley Blackwell, vol. 47(1), pages 53-65.
- Christopher Bruce & Andrea Laroiya, 2007. "The Production of Eco-Labels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(3), pages 275-293, March.
- Cole, Matthew A. & Elliott, Robert J.R. & Shimamoto, Kenichi, 2005. "Industrial characteristics, environmental regulations and air pollution: an analysis of the UK manufacturing sector," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 121-143, July.
- Olivier Parent & James P. Lesage, 2007. "Bayesian Model Averaging for Spatial Econometric Models ," University of Cincinnati, Economics Working Papers Series 2007-02, University of Cincinnati, Department of Economics.
- Geweke, J, 1993. "Bayesian Treatment of the Independent Student- t Linear Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages S19-40, Suppl. De.
- Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2003.
"On Export Rivalry And The Greening Of Agriculture - The Role Of Eco-Labels,"
18764, University of Bonn, Center for Development Research (ZEF).
- Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2004. "On export rivalry and the greening of agriculture--the role of eco-labels," Agricultural Economics, Blackwell, vol. 31(2-3), pages 135-147, December.
- Gilles Grolleau & Sana El Harbi, 2008. "Why some countries adopt ecolabeling schemes in their regulatory arsenal and others do not?," Economics Bulletin, AccessEcon, vol. 17(3), pages 1-11.
- Holloway, Garth & Shankar, Bhavani & Rahman, Sanzidur, 2002. "Bayesian spatial probit estimation: a primer and an application to HYV rice adoption," Agricultural Economics, Blackwell, vol. 27(3), pages 383-402, November.
- Sedjo, Roger & Swallow, Stephen, 1999. "Eco-Labeling and the Price Premium," Discussion Papers dp-00-04, Resources For the Future.
- Magnani, Elisabetta, 2000. "The Environmental Kuznets Curve, environmental protection policy and income distribution," Ecological Economics, Elsevier, vol. 32(3), pages 431-443, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stefano Puddu).
If references are entirely missing, you can add them using this form.