The ISO 14001 Standard and Firms’ Environmental Performance: Evidence from the U.S. Transportation Equipment Manufacturers

Manufacturers have relied on environmental management systems to meet government environmental regulations, enhance their environmental performance, and reduce their impact on the environment. We investigate the impact of ISO 14001 certification on manufacturers’ toxic release levels. We applied the censored quantile instrumental variable estimator (CQIV) to data on U.S. transportation equipment manufacturing subsector facilities. Results show that for large firms, encouraging voluntary adoption of ISO 14001 might be an effective government strategy to reduce on-site pollution. However, for small firms and for the purpose of reducing off-site pollution, other economic incentives or regulations might be warranted.