Eco-label Adoption in an Interdependent World

MPRA Paper from University Library of Munich, Germany

Abstract: The growing popularity of national efforts to promote eco-labeling raises important questions. In particular, developing countries fear that the eco-label can deliberately impose the environmental concern of (high income) importing countries on their production methods. Yet, empirical studies of the adoption of eco-labelling schemes at the cross-country level are scarce due to the lack of data availability. In this paper, the decision to introduce an eco-label is analyzed through a heteroskedastic Bayesian spatial probit, which allows the government’s decision to introduce an eco-label to be influenced by the behaviour of the neighbouring countries. The estimation is performed by extending the joint updating approach proposed by Holmes & Held (2006) to a spatial framework. Empirical evidence highlights the importance of a high stage of development, innovation experience and potential scale effects in the implementation of an eco-label scheme. In addition, results confirm the existence of a strategic interdependence in the eco-label decision.

Keywords: Bayesian Spatial Probit; International Trade; Environmental Policy; Eco-labelling (search for similar items in EconPapers)
JEL-codes: C11 C25 F18 (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-agr and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Eco-label Adoption in an Interdependent World (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20268

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