Is There Any Difference Between SMEs and Large Enterprises in the Incentive of ISO14001 Certification and the Effect of Certification?

Abstract

Recently, it is pointed out that environmental practices of SME are not carried out compared to large enterprises. This difference results from the fact that SMEs are exempt from environmental regulations. Thus it is necessary for SMEs to deal with environmental problem voluntary. In this study, we focus on ISO14001, which is a type of voluntary environmental practices recognized around the globe. We analyze if there are different incentives for acquiring ISO14001 certification and compare the improvements in environmental performance, between SME and large enterprises.
We find that the main region of sales does not affect ISO14001 certification for large enterprises, although SMEs' main region of sales affect ISO 14001 certification. In addition, SMEs have lower incentives to adopt ISO14001 certification than large enterprises. However, there is no difference in environmental performance between SMEs and large enterprises. The results also implied that support from the local governments for adopting ISO14001 is an effective measure that facilitates SMEs’ voluntary environmental practices, which improves their environmental performance.