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This paper analyzes how national institutional factors affect the adoption of the international environmental management standard ISO 14001, using a panel of 139 countries from 1996 to 2006. The analysis emphasizes that during the emerging phase of the standard, the potential lack of consensus within the constituents of the national institutional environment concerning the value of a new standard could send mixed signals to firms about the standard. The results show that in the early phase of adoption, regulative and normative forces within the institutional environment can work against each other. Results also show that regulative or coercive forces play a relatively more important role in the early phase of adoption of the standard than in the subsequent phases of diffusion. In the later phases of diffusion of ISO 14001, normative forces, such as the diffusion of other management standards, as well as factors related to trade, play a more important role. Because of the similarities between environmental management standards and corporate social responsibility standards, this study can help identify some of the challenges for diffusion of ISO management standards in the area of social responsibility.
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