Adoption timing of OHSAS 18001 and firm performance: An institutional theory perspective

Abstract Previous studies have shed light on the effects of the adoption of OHSAS (Occupational Health and Safety Assessment Series) 18,001 certification on performance. One important factor that has been neglected so far is the adoption timing. The question of whether early OHSAS 18001 adopters achieve better financial performance and operational performance than do late adopters (or vice versa) remains unanswered. We develop hypotheses and then analyze the secondary longitudinal data of listed Chinese manufacturing firms by employing a rigorous event study approach and performing regressions. The results indicate that early adopters enjoy significantly greater performance gains than do late adopters and this can be explained by institutional theory. We find that early adopters of OHSAS 18001 certification motivated by normative pressure realize additional financial performance from the second year to the fourth year after adoption, and the early adopter advantages of improved labor productivity can at least last in the medium term, but late adopters motivated by coercive and mimetic pressure only benefit in the preparation year. Moreover, early adoption is more favorable to firms with high labor intensity and low internationalization level. Thus, this study extends research in understanding the effects of OHSAS 18001 on firm performance and suggest new insights to the implementation of occupational health and safety practices.