This paper uses plant level data on the worlds copper min- ing industry to measure changes in e¢ ciency from the adoption of the ISO 14001 environmental standard. The ISO 14001 is a voluntary standard that sets out minimum guidelines and procedures that rms should follow in order to achieve more e¤ective management of the environment. Anecdotal and case study lit- erature suggests that rms are motivated to adopt the ISO 14001 standard and seek certi cation for a number of reasons. One important reason is the desire to achieve greater e¢ ciency and cost savings through changes in operating proce- dures and processes aimed at the minimization of waste pollution and reduction in the use of resource inputs. Using plant level data from 1992-2007 on virtually all of the worlds industrial copper mines the study tests this hypothesis in a stochastic frontier and random e¤ects model framework. The study measures the impact on operations of ISO 14001 adoption both in respect to the inten- tion to seek ISO 14001 certi cation (the period before certi cation when rms must make necessary changes to their operations and management) and the pe- riod when and after certi cation is achieved. The study nds no evidence that adoption of the ISO 14001 standard imposes a cost on rms either through lower e¢ ciencies or higher costs. In fact, in many cases adoption is associated with higher e¢ ciency, and to a certain extent, lower costs. Thus, the studys ndings would tend to go against the claims of much of the academic literature that regulation has negative impacts on the rm. Although ndings were not robust to model choice or a subset sample, our results clearly indicate that, at a minimum, the adoption of the ISO 14001 does not raise costs or lower e¢ ciency for rms.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by Rimini Centre for Economic Analysis in its series Working Paper Series with number
03-09.