Why does the diffusion of environmental management standards differ across countries? The role of formal and informal institutions in the adoption of ISO 14001

Abstract This research explores the factors underpinning the international diffusion of environmental management standards (EMSs), focusing on how macro-level institutions explain differences in the extent to which ISO 14001 has penetrated into each country. We argue that macro-level institutions affect the diffusion of ISO 14001 by shaping both how managers assess it and the pressures that stakeholders exert on firms to adopt it. Our results, based on a sample of 49 countries between 2000 and 2014, show that informal and formal institutions, namely, uncertainty avoidance and market-supporting institutions, contribute to explaining cross-country variations in the number of firms implementing ISO 14001.