Estimating the Impact on E¢ ciency of the Adoption of a Voluntary Environmental Standard: An Empirical Study of the Global Copper Mining Industry

This paper uses data on the world’s copper mining industry to measure the impact on e¢ ciency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that …rms are motivated to adopt this standard so as to achieve greater e¢ ciency through changes in operating procedures and processes. Using plant level panel data from 19922007 on most of the world’s industrial copper mines, the study uses stochastic frontier methods to investigate the e¤ects of ISO adoption. The variety of models used in this study …nd that adoption either tends to improve e¢ ciency or has no impact on e¢ ciency, but no evidence is found that ISO adoption decreases e¢ ciency. Key Words: ISO 14001 environmental standard; …rm performance; stochastic frontier cost function; copper mining industry. Running Title: E¢ ciency & Voluntary Standards in the Global Copper Industry 1Address for correspondence: Lise Tole, Department of Economics, University of Strathclyde, 130 Rottenrow, Glasgow G4 0GE, U.K. Email: [email protected].