Institute for Social, Behavioral, and Economic Research

This paper analyzes the determinants of the cross-national adoption of the international Environmental Management System standard ISO 14001 using a panel of 102 countries from 1996 to 2000. I use new institutional economics to develop hypotheses on the impact of the institutional environment on the cost of adopting the management standard. I also develop hypotheses using the institutional sociology perspective to address the role of the institutional environment in affecting demand and legitimation processes related to the standard. The results of the statistical analysis show that both rationales of cost minimization and legitimation play a role in the adoption of the standard. Using both theories improves our understanding of institutional forces affecting the early adoption of emerging management standards.