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A Spatiotemporal Analysis of the Global Diffusion of ISO 9000 and ISO 14000 Certification

Simon Graduate School of Business, University of Rochester, 3-110R Carol Simon Hall, Rochester, New York 14627
Anderson School of Management, University of California at Los Angeles, 110 Westwood Plaza, Los Angeles, California 90095
Anderson School of Management, University of California at Los Angeles, 110 Westwood Plaza, Los Angeles, California 90095
paulo.albuquerque{at}simon.rochester.edu
bart.bronnenberg{at}anderson.ucla.edu
charles.corbett{at}anderson.ucla.edu

We study the global diffusion of ISO 9000 and ISO 14000 certification using a network diffusion framework. We start by investigating the presence and nature of contagion effects by defining alternative cross-country networks and testing their relative strength. Second, we study how the rate of diffusion differs between the two standards and between early- and later-adopting countries. Third, we identify which countries had more influence on diffusion than others. Empirically, we build a diffusion model which includes several possible cross-country contagion effects and then use Bayesian methods for estimation and model selection. Using country by year data for 56 countries and nine years, we find that accounting for cross-country influences improves both the fit and the prediction accuracy of our models. However, the specific cross-country contagion mechanism is different across the two standards. Diffusion of ISO 9000 is driven primarily by geography and bilateral trade relations, whereas that of ISO 14000 is driven primarily by geography and cultural similarity. We also find that the diffusion rate of ISO standards is higher for later-adopting countries and for the later ISO 14000 standard. We discuss several implications of our findings for the global diffusion of management standards.

Key Words: global diffusion; management practice; ISO 9000; ISO 14000; spatiotemporal analysis; Bayesian estimation
History: Received: December 22, 2004;