Voluntary Agreements to improve Environmental Quality: Symbolic and Substantive Cooperation Articles uri icon

publication date

  • June 2010

start page

  • 575

end page

  • 601

issue

  • 6

volume

  • 31

International Standard Serial Number (ISSN)

  • 0143-2095

Electronic International Standard Serial Number (EISSN)

  • 1097-0266

abstract

  • Within the context of environmental voluntary agreements (VAs), this paper analyzes the determinants of the degree of participation by firms in collective corporate political strategies that aim to shape
    government policy. We demonstrate that substantive cooperative
    strategies are more likely to be pursued by firms that enter a VA close
    to its initiation, while symbolic cooperation is more likely behavior by
    late joiners. We show that late joiners and early joiners within VAs
    adopt different cooperative strategies because they face different
    institutional pressures. Our analysis is based on the strategies of
    firms participating in the Climate Challenge program (1995&-2000)
    established by the U.S. Department of Energy and representatives of the
    national electric utilities to reduce greenhouse gas emissions. Our
    results show that early joiners were subjected to higher levels of
    political pressure at the state level and were more dependent on local
    and federal regulatory agencies than late joiners were. Early joiners
    were also better connected to the trade association and more visible.
    Late joiners had undertaken significantly less investment in
    environmental improvements than early joiners. Our paper also
    illustrates the difficulty involved in using VAs to try to induce
    improved environmental outcomes when there are no sanctioning
    mechanisms. Although early entrants reduced their emissions more than
    nonparticipants, our results show no significant difference overall
    between participants and nonparticipants in the reduction of their
    emissions.