Voluntary Environmental Action and Export Destinations: The Case of Forest Certification
By: Moeltner, Klaus; van Kooten, G. Cornelis
Moeltner, Klaus; van Kooten, G. Cornelis, Voluntary Environmental Action and Export Destinations: The Case of Forest Certification, Journal of Agricultural and Resource Economics, Volume 28, Issue 2, August 2003, Pages 302-315
There is an increasing tendency for forest product firms worldwide to adopt sound environmental management practices by voluntarily agreeing to have their forest practices certified by third parties. Using a simple model of profit maximization, we illustrate that the puzzling emergence of this non-state, self-imposed governance structure is compatible with firms' profit motives. An empirical model using firm data from three countries shows firm location and export destinations play a key role in firms' decisions to seek certification, while the nature of forestland ownership has no significant impact on certification decisions.