Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 411: Corporate environmental management in transition economies: The case of Central and Eastern Europe

Jorge Garcia (), Randy Bluffstone () and Thomas Sterner ()
Additional contact information
Jorge Garcia: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Randy Bluffstone: Department of Economics, Portland State University
Thomas Sterner: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

Abstract: We use firm-level data to study the adoption of Environmental Management Practices (EMPs) in the most polluting industrial sectors in Bulgaria, Hungary, Lithuania, Poland, Romania, and Slovakia during the 1990 – 1998 period when these countries were in a transition away from a centrally planned economy. Despite the stickiness of a long established managerial regime and the declines in industrial output during this period, around 42% of the firms in our sample adopted Environmental Plans (EPs) and/or established Environmental Departments (EDs). The analysis reveals that enforcement and public disclosure of the environmental performance of firms are the most important forces behind the implementation of both of these EMPs. Also, but to a lesser extent, export oriented firms and larger firms are prone to adoption. Finally, we use a methodology that clarifies some of the links between different EMPs not addressed in earlier studies. Notably, once a firm has decided to adopt (or not adopt) an ED, additional increases in enforcement do not to lead to EP implementation.

Keywords: Environmental Management; Bivariate Analysis; Central and Eastern Europe

JEL-codes: C25; Q53; Q58

24 pages, December 4, 2009

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