Does the Rate of Participation in the Voluntary Action Plans Matter When Member Firms Evaluate Their Industry Associations?

Abstract

In Japan, many industrial associations have drawn up voluntary action plans and worked on greenhouse gas emission reductions at their production phase since 1997. However, accumulation of research and investigation into effectiveness of such plans is limited despite of their long history. This deficiency is more significant at firm level, due to less availability of data. This paper investigates whether the rate of participation in the voluntary action plans matters when member firms evaluate their industry associations. The ordered probit model is applied and the results show that it actually matters for the small enterprises, and higher participation results in the higher evaluation. This indicates that an industrial association can easily collaborate with its member firms especially for small ones, if majority of member firms participate in the plan. It is also shown that in general larger enterprises give relatively higher evaluation to their associations compared to the small and medium sized enterprises. There are a variety of industries and potential participation of member firms differs as well. Therefore, it might be inappropriate to apply the voluntary action plans to all these industries. Rather, the government is better to choose sectors where such plans work well.