Environmental Policy Performances for Sustainable Development: From the Perspective of ISO 14001 Certification

Authors

Sang M. Lee, University of Nebraska - LincolnFollow
Yonghwi Noh, Myongji University, SeoulFollow
Donghyun Choi, Korea Aerospace University
Jin Sung Rha, Dankook University, Yongin, South Korea

Date of this Version

2017

Citation

Published in Corporate Social Responsibility and Environmental Management 24 (2017), pp 108–120. doi 10.1002/csr.1395

Comments

Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment. Used by permission.

Abstract

This study investigated the financial performances of environmental policy by using the long-term effect of ISO 14001 certification. Drawing on a natural-resource-based view of the firm, this study examined abnormal performances of ISO 14001 certified firms on the New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotations (NASDAQ) in the USA during the period 1996–2010 employing a rigorous event study methodology. The results indicate that the profitability variables showed immediate positive abnormal effects after firms applied for the ISO 14001 certification, while the market benefit variable showed gradual improvements after obtaining the certification. However, ISO 14001 did not show significant effect on the internal process improvement. Overall, ISO 14001 was found beneficial to the firm in the long run from the perspectives of profitability and market benefits.