Intra-Industry spillover effects of ISO 14001 adoption in Japan

Employing an extensive dataset of Japanese production facilities across a large number of industries, this paper examines the determinants of ISO 14001 adoption and the existence of intra-industry spillovers. To estimate the spillovers, we employ a spatial autoregressive probit model. We find two types of ISO 14001 adoption spillovers; supply-side (technical capacity) and demand side (market pressure from competitors). Particularly, there are positive spillovers between facilities with similar sale in the same industry. Estimation results also suggest that plant size, air emission intensity and pressure from neighboring residents have a significant effects on ISO 14001 adoption. However, local governments’ support programs do not stimulate ISO 14001 adoption.