Why Japanese Firms Choose to Certify: A Study of Managerial Responses to Environmental Issues

This paper examines empirically the determinants that led large Japanese manufacturers to (1) incorporate environmental goals in their decisions, (2) obtain environmental certification (ISO 14001), and (3) become early adopters of environmental certification. We estimate two sets of models: (1) models based on a profit maximization assumption and (2) models which incorporate utility maximization arguments, recognizing that managersʹ values, attitudes, and beliefs may also influence firmsʹ decisions. The empirical analysis suggests that while the costs and benefits of voluntary actions to enhance or protect the environment and the capacity to act are significant determinants of voluntary environmental commitment, so are the environmental values, beliefs, and attitudes of managers.