Assessing participation in voluntary environmental programmes in the developing world: The role of FDI and export orientation on ISO14001 adoption in Thailand

Empirical assessments of the determinants of firm participation in Voluntary Environmental Programmes (VEPs) in the developing world are largely absent from the environmental regulation literature, leaving a number of important factors unique to such countries unexplored. This article examines these factors, namely the roles played by Foreign Direct Investment (FDI) and export orientation, in addition to factors deemed important in the industrialized world context to the problem of ISO14001 adoption in one developing nation, Thailand. We make use of unique primary data from 494 firms, and focus on three important industries, the resource-based food and beverages industry, the labour-intensive textiles and wearing apparel industry, and the more high-technology electronics and electrical appliances industry. We find that FDI plays a role in ISO14001 adoption, especially FDI from Organization for Economic Co-operation and Development (OECD) and ISO14001-rich countries. Other important determinants include firm size, experience with ISO9000, and production of intermediate products. Firms faced with fewer obstacles to environmental improvements such as those facing lower costs, having more understanding of the procedure, and with greater access to the appropriate technology are also more likely to adopt ISO14001.