Do industry associations influence corporate environmentalism in

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Sep 11, 2012 - Max Richards Drive, Uriah Butler Highway N.W., Mount Hope, .... In this study, we rely on sociology's neo-institutional theory to answer this question and .... Table 1 TTCC ''principle 8—environment'' of its code of conduct .... Representativeness of the 131 respondent firms was confirmed by t-tests comparing.
Policy Sci (2013) 46:39–62 DOI 10.1007/s11077-012-9162-x

Do industry associations influence corporate environmentalism in developing countries? Evidence from Trinidad and Tobago Kalim U. Shah • Jorge E. Rivera

Published online: 11 September 2012 ! Springer Science+Business Media, LLC. 2012

Abstract As environmental regulations increase, industry associations play a growing role in representing their respective members. This role has been documented in many industrialized countries but less so in emerging economies. In this study, we investigate the level of corporate environmentalism exhibited by member firms of two industry associations operating in Trinidad and Tobago. Using a two-stage Heckman regression that corrects for the endogeneity introduced by self-selection bias in the evaluation of voluntary choices, our findings indicate that firms that are members of the foreign-originated American Chamber of Commerce of Trinidad and Tobago appear to show stronger corporate environmentalism than those belonging to the locally formed Chamber of Commerce. Enhanced institutional pressures from these respective industry associations, peers and competitors within associations, access and exposure to best practices, networking opportunities and service bundling may explain these differences. These results suggest that environmental policy makers in emerging economies may be able to leverage foreignoriginated industry associations to promote stronger corporate environmentalism. Policy makers may need to consider how to encourage local chambers to emulate the some of the institutional conditions of foreign-originated ones. Keywords Corporate environmentalism ! Industry associations ! Chambers of commerce ! Developing countries ! Neo-institutional theory ! Trinidad and Tobago K. U. Shah (&) Arthur Lok Jack Graduate School of Business, The University of the West Indies, P.O. Box 4874, Max Richards Drive, Uriah Butler Highway N.W., Mount Hope, Trinidad and Tobago e-mail: [email protected] K. U. Shah Faculty of Environmental Studies, York University, HNES109, 4700 Keele St., Toronto, ON M3J1P3, Canada J. E. Rivera Department of Strategic Management and Public Policy, School of Business, The George Washington University, Funger Hall, suite 615, 2201 G Street NW, Washington, DC 20052, USA e-mail: [email protected]

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Introduction Industry associations (IAs) are defined as organizations that represent a group of professional, trade or commercial firms and can target a narrowly defined membership (e.g., the National Armored Cable Manufacturers Association) or be multi-sectoral (e.g., the US Chamber of Commerce) on a regional or national scale (King and Lenox 2000). While there is a growing body of scholarship examining the influence of stakeholder pressures on corporate environmentalism, few researchers have focused their attention on the role of industry associations as stakeholders in this regard (Henriques and Sadorsky 1996; Delmas and Toffel 2004). To date, most such studies continue focusing on IAs that are purveyors of particular certification programs (e.g., the Chemistry Council’s Responsible Care program). The sparse academic research on multi-sectoral industry associations (MIAs) means that we have little systematic understanding of what these ubiquitous organizations actually do (Barnett and Hoffman 2008; Barringer and Harrison 2000). This is so even though they amass million dollar budgets and their lobbying activities significantly influence the competitive environment, shaping regulations in ways that affect industry growth and profitability (Ingram and Inman 1996). In the United States for example, lobbying activities of the US Chamber of Commerce have been linked to voting preferences of elected government officials (Pjesky and Sutter 2002; Schuler et al. 2002). Many IAs also actively influence national environmental debates, such as the National Corn Growers Association does on US biofuels policy (Parcell and Westhoff 2006). But IA activity in the developing world has drawn little attention, even as these countries face increasing industrialization, pollution and stakeholder angst. Firms join IAs for a variety of reasons including to receive support for trade over a broader geographic area, to access training opportunities and market information and to be represented on business and policy issues (Bennett 1997; Hukins 1992). By and large, firms do not join IAs for environmental reasons, but emerging evidence suggests that some may join IAs to ‘‘free-ride’’ on the good environmental reputation of particular IAs and their members (Delmas and Keller 2005). Firms that are members of some IAs may also face stronger pressure to show exemplary environmental performance (Delmas and Toffel 2004; King and Lenox 2000; Hoffman 1999). Some IAs ask firms to commit to environmental improvements and provide them with support to do so, certification and public acknowledgement for commitments made. At best, evidence is mixed on if such schemes actually enhance environmental performance in members, especially where explicit sanctions do not exist (King and Lenox 2000). Such programs often suffer the ill effects of ‘‘free-riders’’ who sign on for reputational benefits but do not make actual environmental improvements. For MIAs like Chambers of Commerce, voluntary environmental commitment schemes are typically not a unique selling point on offer, so the issue of ‘‘free-riding’’ is mitigated.1 So in considering membership to a Chamber of Commerce, environmental reasons are not typically a firm’s primary consideration compared to more traditional business services, opportunities and benefits (Clarke 2004). Yet, in developing countries, IAs like Chambers of Commerce participate on various national-level special government committees. As environmental issues 1

An exception is MIAs with specific policy agendas, such as the Business for Social Responsibility (BSR) organization that markets itself as a coalition of socially responsible firms. But even the BSR does not sponsor a certification scheme neither does it legitimize members’ environmental performance (Tashman and Rivera 2010).

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permeate the work of such committees (Hillman et al. 2004), IAs increasingly contribute to environmental policy decisions. Within the institutional environment of the Chamber, environmental issues undoubtedly arise since environmental regulations and compliance, risk to business, technology and expenses are part and parcel of the modern business environment. How these issues are handled within the institutional context of the Chamber could ultimately impact on members’ environmental behavior. Further, given that institutional contexts within different types of Chambers might vary, so too might impact on members’ environmental behavior. Do members belonging to different, perhaps competing, MIAs exhibit different levels of corporate environmentalism, even in the absence of environmental commitment schemes or sanctions and given that MIAs cater to a diverse membership? Considering this question is critical in developing countries where national-level MIAs of local origin and foreign-affiliated ones (like the American Chambers of Commerce) may potentially be influential players given the weak regulatory enforcement ability of government authorities (Rivera 2010; Shah and Rivera 2007). In this study, we rely on sociology’s neo-institutional theory to answer this question and explain how these different types of MIAs create institutional environments that, to greater or lesser extent, influence the corporate environmentalism of their members. By doing so, we expand the literature to MIAs, where previously it has focused largely on industryspecific associations and/or programs. Similarly, by placing our study in the developing country of Trinidad and Tobago and its burgeoning energy and chemical industry sectors, we enrich a literature still overrepresented by evidence from industrialized nations. We also hope to stimulate discourse about the potential role and use of MIAs by policy makers in developing countries who are seeking alternative or additional vehicles through which to create change rather than traditional, often insufficient, command-and-control environmental regulations (Shah 2011c). The entrenchment of foreign-affiliated Chambers and the growing role of local Chambers in the economic and industrial landscape of developing countries urgently requires the attention of policy researchers especially where the activities of such organizations influence environmental protection and sustainable development.

Emerging economy context: Trinidad and Tobago The Republic of Trinidad and Tobago is an oil and gas-rich country in the southern Caribbean just off the South American mainland. Despite its small size, it is a major international player in the energy sector, trading mainly with the United States, Canada, UK, Brazil, and Europe. Over 40 % of the country’s GDP and 50 % of government revenues depend on the sector. Near 50 % of its national GDP is derived from the energy sector and between 2003 and 2007 alone, US investments in energy-related projects are estimated at over US$3 billion (US Department of State 2009). The oil and gas industry is comprised of upstream oil and gas production and exploration and downstream processing and manufacturing along with chemical production by firms dependent on large inputs of cheap energy from oil and gas feedstock. The petrochemical sector is also highly productive, and the country is ranked in the top five ammonia and methanol producers in the Western Hemisphere. There is now increased emphasis on natural gas production and downstream petrochemical and processing investments. Natural gas feedstock has made Trinidad and Tobago a leading world producer of chemicals such as methanol, ammonia, fertilizers, and liquefied natural gas. For

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example, in 2006, the United States imported 16 % of its natural gas, with some 73 % of this coming from Trinidad and Tobago (Lucie-Smith 2006). These sectors are largely concentrated with most production volume coming from multinational and state owned firms. Small and medium enterprises dominate downstream production and manufacturing. US, Canadian, British, German, Australian, and Indian multinationals among others all operate in Trinidad and Tobago. Unfortunately, as can be expected from this level of industrial activity, Trinidad and Tobago is also the fifth largest carbon dioxide emitter per capita in the world (United Nations 2007). Freshwater and marine pollution, watershed degradation, air pollution from factory stacks and manufacturing particulates, solid and hazardous wastes from the oil, gas and chemical sectors are the other major issues. The Environmental Management Authority (EMA) is the focal regulator gaining its authority through the Environmental Management Act of 1995. Like in many other developing countries, the EMA’s regulatory functions suffer from poor implementation and enforcement because of lack of sufficient resources, lack of research, uncoordinated agency efforts, political interference and lack of will by government officials (Blackman 2000). Simultaneously however, Trinidad and Tobago has seen tremendous growth in public environmental awareness, attributable to increased media attention to environmental issues, increased NGO activity, and enhanced environmental education programs (Shah 2011b). For instance, between 2006 and 2010, the national debate on the building of two aluminum smelters became a political watershed. For the first time in the country’s history, the environmental consequences of industrial development became the foremost topic on the public agenda, spawning enough contention that political parties’ position on the issue was a deciding factor in the outcome of the 2010 general elections. The new government’s election promise of stopping the smelters was kept, much to the approval of the public which had become galvanized against the smelters based on environmental and health concerns. But even before elections, enraged communities and the local academic elite successfully challenged the EMA’s approvals of one of the projects in the High Courts, something that would have been unheard of even a few years ago. A leaked cable2 from the then US Ambassador to the US Department of Energy soon after a national symposium on the issue stated: The public protests that accompanied Alcoa’s smelter proposal have no precedent in Trinidad’s long history of industrial development, as many academics during and after the symposium have pointed out. Taking inspiration from foreign environmentalists’ protests…a vocal group of domestic activists succeeded in dominating media coverage and reversing (government) policy. There are also growing calls for a national sustainable development framework, especially in reference to ‘‘mega-projects,’’ and greater public involvement in determining the path of Trinidad’s development.

Strategic value of industry associations to firms Chambers of Commerce are distinguishable from other industry associations in several ways, most notably by working with firms in multiple industries in a broad range of production, manufacturing and service categories. Bennett et al. (1998) identified four main services offered by Chambers: the support of international trade, training, 2

This leaked cable was made publicly available through http://wikileaks.org/cable/2006/08/06PORTOF SPAIN931.html.

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information services and representation. Hawley and Taylor (2006) note that a long-standing view in the United States is that Chambers function primarily to lobby government to ease regulations. Doner and Schneider (2000) suggest that IAs undertake ‘‘market-supporting’’ activities and ‘‘market-complementing’’ activities (e.g., creating standards). Andriesse and van Helvoirt (2010) found that Chambers were responsible for extensive alliance co-ordination across sectors in China, the Philippines and Malaysia. Hemphill (1992) described the range of trade association activities as ‘‘data collection, educational programs, facilitating technical standards and specifications, insurance programs, legal assistance and government relations.’’ Staber and Aldrich (1983) distinguished four IA activity areas: commercial, public, political, and solidaristic. Others state that IAs serve as the bodies through which firms pursue collective strategy in the political (Hillman and Hitt 1999) or nonmarket environments (Baron 1995). In emerging economies such as those in Latin America and the Caribbean, there are well-established national Chambers, smaller provincial ones and foreign-originated Chambers the most significant being those of the United States and Britain. These latter Chambers are best described as affiliated rather than subsidiary to their foreign originators since operational affairs, finance, administration and elections of officials are independent.3 In Latin America and the Caribbean, they network among themselves through the Association of American Chambers of Commerce in Latin America (AACCLA). Industry associations in Trinidad and Tobago In this study, we focus on two nationally influential, highly visible industry associations: the American Chamber of Commerce of Trinidad and Tobago (AMCHAM) and the Trinidad and Tobago Chamber of Industry and Commerce (TTCC). Neither goes so far as to stringently regulate and standardize the behavior of member firms and membership is voluntary. The AMCHAM aims ‘‘to be the preferred private sector business organization for the stimulation of free and fair trade and investment within the Americas and the Caribbean’’ (AMCHAM 2008). The AMCHAM is affiliated to the US Chamber of Commerce, the world’s largest business federation representing more than three million businesses and organizations of every size, sector and region. The US Chamber of Commerce coordinates a network of twenty-four such local Chambers in twenty-one countries in the Western Hemisphere. This gives its membership a unique advantage in facilitating linkages, networking, and developing activities that lead to the generation of business and market access for their services and goods. Furthermore, these branch Chambers gain perspective from the parent Chamber in the United States, and this in turn influences their position on governance issues such as environmental policy (O’Toole and Hanf 2002). Although the Chamber does not state specific environmental objectives, it operates an executive committee specifically dedicated to ‘‘Health, Safety and Environment’’. This committee has been in existence for over a decade and aims ‘‘to provide direction and leadership and proactively promote environmental safety and health values for the sustainable future of our companies, communities and nation’’. The AMCHAM has been involved in influencing national environmental legislation, policies, and procedures to the benefit of its members; fostering environmental awareness; building effective relationships with key ministries and nongovernmental organizations; and sharing best practices among 3

In the case of the AMCHAM in Trinidad and Tobago, the US Ambassador to Trinidad and Tobago is traditionally made an honorary Chair of the Board.

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Table 1 TTCC ‘‘principle 8—environment’’ of its code of conduct Members shall minimize any damage to the environment arising from their activities Reduce the environmental and health impact of all operations through the responsible use of natural resources, conservation practices and the reduction of waste and emissions Insure that in the production of all goods and services they will meet lawful environmental standards related to the industry Arrange for the safe handling transport and the disposal of raw materials products and waste according to the law Work in partnership with others to promote environmental change, increase understanding of environmental issues and disseminate good practice

its membership. According to the AMCHAM, its membership is approximately 25 % foreign and 75 % domestic firms. The Trinidad and Tobago Chamber of Industry and Commerce, established in 1879, is the oldest industry association in Trinidad and Tobago. Its mission statement is ‘‘to be recognized by our members and the government of Trinidad and Tobago as the most vibrant, influential and authoritative organization in Trinidad and Tobago and the leader in the support of globalization as a means of wealth creation’’ (TTCC 2010). The TTCC is known to be an effective lobbyist for industry interests and continues to make a profound impact on the development of the national economy. It expresses keen focus on generating opportunities for its members to leverage shared resources, knowledge, and contacts in order to create a competitive advantage in the global marketplace. To service its over five hundred firm membership, the TTCC organizes initiatives around committees including alternative dispute resolution, mediation and arbitration services, business referrals, certifications, industrial relations data, and international trade negotiations among others. The TTCC does not maintain any environmental management committee, but a Committee on Community, Health and Wellness has from time to time addressed some environmental health issues. All new members subscribe to a Code of Conduct comprised of eight principles, one of which specifically addresses ‘‘Environment’’ (see Table 1). While all members are required to adhere to these principles under penalty of membership termination should there be violation, this penalty has never been invoked on any firm, nor has any member come under investigation or threat of sanction even if environmental allegations are made in the media or by the EMA. Industry associations as drivers of corporate environmentalism The neo-institutional perspective We believe that organizational sociology’s neo-institutional theory can provide important insights regarding the relationship between corporate environmentalism and industry association membership (Hoffman 1999; King and Lenox 2000; Rivera et al. 2009). Neo-institutional theory points out that firms operate within an external context of taken-for-granted institutions4 that define what constitutes legitimate behavior. Thus, businesses are not only profit maximizers but also legitimacy seeking and susceptible to institutional pressures (Scott 1995). Legitimacy is important for businesses because it enhances survival through increased 4

Institutions are understood as formal state organizations, policies and regulations, and informal shared schemas, routines, norms, symbols, and ceremonial traditions that are highly stable and facilitate and constrain the behavior of social actors (Hall 1986).

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respect and access to resources (Dacin et al. 2002; DiMaggio and Powell 1991).5 A central insight of this theory posits that firms facing similar institutional pressures tend to adopt similar structures and strategies becoming more similar over time (Jepperson 1991; Scott 1995). This process is termed isomorphism. Institutional pressures are classified as coercive, normative, and mimetic to respectively emphasize the role of pressures exerted by government agencies, professions and other types of associations, and taken-for-granted social expectations. Each Chamber constitutes an inter-organizational network with itself in a de facto central position through which it is a facilitator of collaboration, dialogue, and strategic alliances among its members. The network becomes a platform for mimetic behavior where laggards can learn from leaders (Tashman and Rivera 2010; Doner and Schneider 2000). Building on these basic ideas, we propose that different industry associations generate contrasting institutional pressures that are thus correlated with dissimilar levels of corporate environmentalism by their member firms. Below, we discuss in detail this proposition for the particular context of Trinidad and Tobago. Neo-institutionalism and industry associations Industry associations in Trinidad and Tobago operate in a small economy highly dependent on natural resource extractive industries; dominated by large foreign firms; and under an infant environmental regulatory regime where the EMA suffers from a systemic lack of political, technical, administrative, and financial resources. Thus, coercive institutional pressures to comply with environmental regulations are relatively weak (Shah and Rivera 2007). The history of national development provides strong impetus for normative pressures (Acutt et al. 2004). The country experienced industrial ‘boom’ in the 1960s–1970s, ‘bust’ in the 1980s and unprecedented rejuvenation in the 1990s. During the latter period however, governments spoke highly of reducing economic vulnerability by using economic rents accrued from the energy sector for diversification into tertiary manufacturing and technological industries. Continued failure to do so propels public criticism of government industrialization policy and the industries that benefit from it. Highlighting environmental issues has become one means for activists to forward their arguments about ‘‘broken government promises’’. In this operating environment, the normative and mimetic pressures exerted by industry associations on their member firms may play an important role. Industry associations have a strong interest in maintaining a positive industry-wide environmental reputation in order to avoid increased scrutiny from environmental activists, media, and regulators (King and Lenox 2000). Industry associations’ normative pressures usually exert influence on firms by relying on peer pressure and embarrassment of those that do not comply (Hoffman 1999). Improvement may also be driven by industry associations when individual firms are made to be sensitive about their reputation and how they are perceived by fellow members who are peers and competitors. Firms may also view their membership in industry associations as a marker of legitimacy in the operating environment especially when peers are also members. Firms improving their corporate environmentalism because of legitimacy reasons may do so in order to comply or stay ahead of regulation (Shrivastava 1995; Bansal and Roth 2000; 5

Legitimate businesses are those whose actions are seen as, or presumed to be, ‘‘desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions’’ (Suchman 1995: 574).

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Banerjee et al. 2003; Clemens and Douglas 2006) or regain reputation lost to past environmental violations. Mimetic pressures emerge from the tendency to imitate practices from successful peers. This tendency is higher when firms experience uncertain or ambiguous situations such as those imposed by environmental management decisions (DiMaggio and Powell 1991). In situations short on information valuable to predicting the firm’s next strategic actions, firms may emulate the decision behaviors of market leaders. This kind of mimicry may occur unintentionally and indirectly, or explicitly, diffused by industry associations (Jennings and Zandbergen 1995; Clemens and Douglas 2006; Shah and Rivera 2007). Industry associations can also coordinate access to a wealth of valuable environmental management knowledge and technical assistance including information sources, systems, technologies, and environmental experts and specialists that are unavailable or inaccessible outside of the association. IAs could be considered as institutional entrepreneurs (Montiel and Husted 2009) where they create the ability to motivate co-operation among their members by providing them with common meanings and identities. Different IAs may possess similar social skills but may vary in their interest in particular institutional mechanisms that give them the ability to enhance or transform members (Maguire et al. 2004). Mechanisms that could be employed include identifying political opportunities, framing issues and problems and mobilizing membership by embedding new beliefs, norms and values into social structures (Zilber 2007). Foreign-originated industry associations like the AMCHAM that were originally established in advanced industrialized countries may have enhanced visibility locally and abroad, further increasing expectations and monitoring of their members’ environmental practices compared to those of firms belonging to local industry associations. AMCHAM like industry associations may also have enhanced capabilities and resources to access foreign technologies, experts and best practice guides in a faster, less-expensive manner than local industry associations. The market and cultural context in the most advanced industrialized countries is also more favorable to environmental and social protection efforts and thus may make the top officers of international industry associations more receptive to environmental policy concerns and regulations (Levy and Kolk 2002; Rivera 2002). Based on these arguments, we suggest that: Hypothesis 1: The influence of membership in an industry association originating from an industrialized country (like the AMCHAM) on strengthening corporate environmentalism is greater than the influence of membership in an industry association of local, emerging economy origin (like the TTCC).

Research methodology Sample selection We focus on the population of firms in Trinidad and Tobago’s chemical and oil and gas industries.6 A comprehensive list of firms was compiled using Trinidad and Tobago’s Central 6

The chemical industry includes paints and varnishes, pharmaceuticals, soaps and detergents, adhesives and waxes, industrial gases, pigments and inks, pesticides, cement, glass and glass products, plastic products, clay products, asbestos products, and plastic packaging. Oil and gas industries include oil and natural gas exploration and production, refineries, bulk raw material manufacturers, industrial waste treatment facilities, structural fabricators, transportation of oil and gas, petrochemicals including downstream manufacturers, natural asphalt, and asphalt products (Central Statistical Office of Trinidad and Tobago 2004).

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Statistical Office database. From an initial list of 734 firms, we eliminated those with less than 10 employees,7 those not directly involved in actual operations and processing (e.g., consultants) and those missing reliable contact information. Of the final sample frame of 231 firms, 131 responded (45.2 % response rate). This is typical, if not better than expected, given that response rates are low in developing countries (Shah 2011a; Baruch 1999), where sensitive environmental data are being collected (Kirkpatrick et al. 2004; Rivera 2002) and when surveys are directed to top managers (Brunetti et al. 1998). Representativeness of the 131 respondent firms was confirmed by t-tests comparing responders to non-responders across firm age and size (two variables for which we had data for both groups). No significant differences were found. Survey selection bias was tested by comparing the corporate environmentalism ratings of early survey responders to late survey responders (as a proxy for non-responders) as first suggested by Armstrong and Overton (1977) and used in similar studies including Husted and Allen (2006), Delmas and Toffel (2004) and Christmann (2004). Results of t-tests indicated no significant difference. Data collection Two survey questionnaires were designed based on best practice methods to maximize response rates (Hox et al. 1998; Dillman 1978). One survey targeted top firm managers and was administered over a 6-month period to collect information about basic firm characteristics (e.g., size, location, industry association membership, etc.). Requests for interviews were made up to four times over a 2-month period as necessary. Each firm survey was conducted in face-to-face interviews. Through the interviews, managers also identified key community, value chain, and government stakeholders who were aware of firms’ environmental practices. This information was triangulated with other sources such as company reports and newspaper reports to further substantiate which stakeholders were most informed. In this way, a short list of community, value chain, and government stakeholders were identified for each firm. The second questionnaire targeted these identified stakeholders of each respective firm. In this questionnaire, stakeholders rated firms based on sixteen items across four categories. The data collected here were used to calculate the corporate environmentalism rating of each firm, that is the dependent variable in our analysis (see details under Dependent Variable section). To ensure the validity and reliability of the overall scale, factor analysis and Cronbach’s alpha were calculated. Scale validity was confirmed by factor analysis with varimax rotation. A Cronbach’s a coefficient equal to .94 also indicated that the scale was reliable for measuring the corporate environmentalism construct. Pedhazur and Schmelkin (2001) recommend that a Cronbach’s a [ .80 is acceptable. Variable measures Dependent variable: corporate environmentalism In Trinidad and Tobago, as is typical in other developing countries, actual physical environmental measurement data were scarce and where available, of uncertain reliability. 7

Local industry experts recommended that firms with less than 10 employees should be excluded as they had neither the resources nor motivation to go beyond minimal regulatory compliance, and it was doubtful they have expertise able to complete the survey questionnaire to be administered in this study. This recommendation was accepted since response rates from this subset of firms were likely to be poor and information gathered of low quality, which would only serve to diminish the accuracy of the study.

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Thus, we followed a next best approach of measuring the firm-level corporate environmentalism using external stakeholder ratings.8 To do so, we adapted a scale originally developed and validated by Banerjee (2002) to measure corporate environmentalism in the Canadian oil and gas sector (Banerjee 2002). This index assesses four areas of corporate environmentalism: internal environmental orientation, external environmental orientation, corporate strategic focus, and functional strategic focus. A total of sixteen question items across these four areas comprise the corporate environmentalism rating (see Table 2). Each question is rated on a seven-point Likert scale. One stakeholder in each of the three groups (government, community and business chain) completed the questionnaire for each firm. The overall corporate environmentalism percent score for each firm was obtained by calculating the average for the three stakeholder ratings. That is, the Likert scores for all sixteen items included in the scale were summed for each of the three stakeholders, then divided by the maximum possible score and multiplied by one hundred to yield a percentage rating. Independent and control variables Table 4 summarizes the independent and control variable measures used in the analysis. The selection of control variables was based on the most prevalent causal variables included in previous studies of corporate environmentalism (Christmann 2004; Bansal and Roth 2000). We control for firm size since larger firms are found to sustain higher environmental research intensities (Glanchant 1996) and more likely to join beyond compliance initiatives (DeCanio and Watkins 1998; Dasgupta et al. 2000; Karamanos 2000; King and Lenox 2000). Industrial location is controlled since evidence suggests that firms inside of industrial parks come under more regulatory scrutiny (Deutz and Gibbs 2004) and synergistic relationships with neighbors may result in (Zucker 1977; Cheng-Nan et al. 2004) increased environmental efficiency. Foreign market dependence is controlled since research suggests that for firms to export to industrialized markets, they are often required to raise their environmental standards to meet the stricter regulations (Christmann 2000; Dowell et al. 2000). Firm ownership is controlled since evidence suggests that state-run facilities shielded from market competition may be less inclined to invest in environmental management (Darnall and Edwards 2006) and have higher pollution levels (Wang and Jin 2007). Community location is controlled since urban-situated firms tend to experience more intense institutional pressures than those situated in rural areas. Urban stakeholders are more assertive, better educated, better informed, and more politically organized than rural stakeholders (Freudenburg 1991; Delmas and Toffel 2004) (Table 3). Statistical analysis techniques To test our hypothesis, we used a Heckman’s two-stage modeling process that corrects for the endogeneity introduced by self-selection bias in the evaluation of voluntary choices (Greene 2000; Heckman 1978). This two-stage technique9 has been widely used to evaluate environmental and economic benefits generated by voluntary programs and organizations (Arora and Cason 1995; Hartman 1988; Khanna 2001; Rivera 2002; Welch et al. 8

Other peer-reviewed research that have used survey scales to measure levels of corporate environmentalism include Sharma and Vredenburg (1998), Sharma (2000) and Banerjee et al. (2003).

9

The two Heckman regression stages were estimated separately using the SAS/STAT 9 software program.

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Table 2 Scale used to measure corporate environmentalism of firms Corporate environmentalism scale question items

Factor loading

Environmental orientation: internal 1

Firm makes a concerted effort to make every employee understand the importance of environmental preservation

.35

2

Firm has a clear policy statement urging environmental awareness in every area

.82

3

Environmental preservation is a high priority activity in the firm

.84

4

Preserving the environment is a central corporate value in the firm

.79

Environmental orientation: external 5

The financial well being of the firm does not depend on the state of the natural environment

.75

6

The firm has a responsibility to preserve the environment

.79

7

Environmental preservation is vital to the firm’s survival

.76

8

The firm’s responsibility to its customers, stockholders, and employees is more important than its responsibility toward environmental preservation

.72

Environmental strategic focus: corporate 9

The firm has integrated environmental issues into its strategic planning process

.85

10

In the firm, ‘‘quality’’ includes reducing the environmental impact

.83

11

The firm links environmental objectives with other corporate goals

.81

12

The firm is engaged in developing products and processes that minimize environmental impact

.82

13

Environmental issues are always considered when new products are developed or new services offered

.83

Environmental strategic focus: functional 14

The firm emphasizes the environmental aspects of its products and services in advertising

.85

15

The firm’s marketing strategies for products and services have been influenced by environmental concerns

.87

16

In the firm, product-market decisions are always influenced by environmental concerns

.79

Cronbach’s alph

.94

2000). Controlling for the endogeneity introduced by self-selection bias is necessary to avoid overestimating the effect of non-random membership in voluntary industry associations (Hartman 1988; Heckman 1978; Maddala 1986). In the first stage of the analysis, two probit regression models identify independent variables, Xi, significantly related to membership in each of the two industry associations: the AMCHAM (Di1; model 1) and the TTCC (Di2; model 2) (Maddala 1986). These probit regressions are also used to estimate the probability of participation in each respective industry association: the AMCHAM (Pi1) or TTCC (Pi2). The probit regression equation model for the AMCHAM is: Di1 ¼ d þ ai Xi þ ei ;

ð1Þ

where: Di1 = participation in AMCHAM; d = Regression constant term; Xi = Independent variables (Firm size, industry sector, export dependence, joint venture status); ai = Regression coefficient for independent variable Xi; ei = random error term. Dependence on foreign exports (to industrialized markets) is included as a control at this stage

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Table 3 Measurement of independent and control variables Variable

Measurement

Independent Industry association membership

Dummy variable equal to one if a firm is a member of an industry association and zero otherwise

American Chamber of Commerce of Trinidad and Tobago membership

Dummy variable equal to one if the firm was a member of the American Chamber of Commerce of Trinidad and Tobago and zero otherwise

Trinidad and Tobago Chamber of Commerce membership

Dummy variable equal to one if the firm was a member of the Trinidad and Tobago Chamber of Commerce and zero for non-members

Control Firm size

The natural logarithm of the number of firm employees. The natural logarithm was used to normalize firm size (Greene 2000)

Industrial location

Dummy variable equal to one if the firm facilities were located inside of an export processing zone and zero otherwise

Joint venture with foreign partners

The percentage of firm shares held by foreign interests

Joint venture with state partners

The percentage of firm shares held by the state or state interests

Foreign market dependence

The percentage of sales or services done in North America, Europe, and Japan in the last fiscal year

Community location

Proxied using a dummy variable equal to one if the firm was within a two-mile radius of an urban community and zero otherwise

since it is possible that local firms seeking market information/advantages to gaining entry in the US market might believe AMCHAM membership affords them this opportunity. Ownership status is included since majority of foreign-owned firms may seek TTCC membership to gain local market information that could provide advantages to their business. In the second stage of the analysis, an ordinary linear regression model is used to examine the association between firms’ corporate environmentalism (Yi) and their probability of participation in each of the different industry associations—the AMCHAM (Pi1) and TTCC (Pi2). The inclusion of these probability of participation variables also allows control for self-selection bias in the estimation of the ordinary least squares regression model (Maddala 1986). Yi ¼ a þ bi X2i þ ci Pi1 þ ci Pi2 þ e2i ;

ð2Þ

where X2i = Independent variables (IA membership, firm size, joint venture status, industrial location, and community location); Pi1 = Probability of participation in AMCHAM; Pi2 = Probability of participation in TTCC; e2i = random error term. The error terms are expected to be correlated because they involve measurement error and unobserved factors associated with industry association membership and corporate environmentalism. Industrial location (inside or outside of export processing zones) is included here as it has been shown to influence firm-level environmental responsibility (Shah and Rivera 2007). Community location is also included since urban and rural communities may exert different levels of normative pressure on firms based on affluence, availability of information, education levels and level of NGO activity. This variable is not included in

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the probit regression (stage 1) as it has no bearing on national-level IA membership (although the case might be different if district-level Chambers were being considered).

Results and findings Descriptive results Seventy-four percent of firms in the final sample (n = 131) were members of industry associations. More specifically, 48 % of firms were members of the AMCHAM and 32 % were members of the TTCC. Descriptive statistics cross-tabulated by industry association membership and other predictive variables are presented in Table 4. Table 5 below reports the correlation matrix that, as expected, provides initial evidence to suggest that industry association membership is significantly associated with higher corporate environmentalism (r = .33; p \ .01). AMCHAM membership is also significantly associated with greater corporate environmentalism (r = .50; p \ .01) as is TTCC membership. To check for possible multicollinearity problems, we estimated condition indices and variance inflation factors. These results did not suggest that such problems arose (Belsley et al. 1980).10 Probit regression results (stage 1) Results of the probit regression analysis (stage 1)11 are reported on Table 6 below. Model 1 correctly classifies 77.3 % of the membership decisions. Findings indicate that dependence on foreign export markets is positively and significantly related to membership in the AMCHAM (p \ .05). This suggests that when firms are more dependent on foreign export markets for their survival, they are more likely to become members of the AMCHAM. This is expected since a core function of the AMCHAM as an industry association is to facilitate trade between local Trinidad and Tobago firms and the United States. The United States is the major trade partner of Trinidad and Tobago accounting for nearly half of all trade, thus local firms will potentially be at an advantage to access the US market through allegiance with the AMCHAM. Probit Model 2 (see Table 6) correctly classifies 78.1 % of the membership decisions and findings indicate that joint venture ownership with a foreign firm is positively and significantly related to membership in the TTCC (p \ .05). This suggests that when firms are governed by an ownership structure consisting of a foreignlocal joint venture, they are more likely to become TTCC members. Joint venture researchers point out that firms attempting to penetrate developing country markets usually 10

Condition index and variance inflation measures for the independent variables revealed weak to moderate dependencies among the independent variables. Belsley et al. (1980) suggest that condition numbers [ 30 may suggest colinearity problems and variance inflation factors [ 10 may also require further investigation. None of the three models exceed these values (Model 3, OLS; condition number = 28.3, average VIF = 4.47). 11

The regression coefficients in our two probit models indicate the effects of specific independent variables on a cumulative normal function of the probabilities that the firms in our sample belong to the American Chamber of Commerce (AMCHAM) (Model 1, Table 6) or Trinidad and Tobago Chamber of Industry and Commerce (TTCC) (Model 2, Table 6). That is, these probit coefficients cannot be interpreted as indicating the marginal effect of an independent variable on the probability of belonging to either AMCHAM or TTCC. For instance, in our Model 1 (see Table 6), the increase in the probability of being a member of AMCHAM that can be attributed to a marginal change in firm size is determined by both the initial value of firm size and the values of other independent variable in the probit regression.

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Table 4 Descriptive Statistics Industry association nonmembers

Industry association members

American chamber members

Trinidad and Tobago chamber members

34 (26 %)

97 (74 %)

64 (48 %)a

42 (32 %)b

Number of firms (%) Total firms: 131 (100 %) Dummy variables: N (%) Community type Urban

8 (6.1)

33 (25.1)

40 (30.5)

28 (21.4)

Rural

26 (19.8)

64 (48.9)

24 (18.3)

14 (10.7)

Indust. park

19 (14.5)

57 (43.5)

40 (30.5)

26 (19.8)

Outside indust. pk.

15 (11.5)

40 (30.5)

24 (18.3)

16 (12.2)

Oil and gas

16 (12.2)

65 (49.6)

50 (38.1)

34 (26)

Chemicals

18 (13.7)

32 (24.4)

14 (10.7)

8 (6.1)

Corporate environmentalism (%)

46.8 (12.6)

56.8 (12.9)

61 (11.6)

52.6 (12.6)

Foreign joint ownership (%)

11.9 (25.8)

18.3 (26.6)

21.7 (28.7)

24.9 (29)

Foreign market dependence (%)

10.9 (22.8)

22.5 (33.5)

29.1 (37)

30.1 (39.5)

Size of firm (no. of employees)

87.7 (83)

155.8 (125)

172.3 (130.8)

198.2 (136.3)

State joint ownership (%)

4.3 (15.1)

6.5 (16.5)

8 (17.4)

7.2 (17)

Industrial location in

Industry sector

Continuous variables: mean (SD)

a, b

Does not sum to 97 firms but 106 since 9 firms are members of both industry associations

find it useful to partner with local firms in order to better understand local operating conditions and increase the likelihood of success (Blumentritt 2003). By extension, it would be advantageous for such joint venture firms to become involved in local industry associations such as the TTCC that is the most prominent such association. Ordinary least squares regression results (stage 2) Model 3 (see Table 7) reports the results of the ordinary least squares regression modeling corporate environmentalism; overall model fit, F(9.37), p \ .001. Findings indicate that firms with higher probability of membership in the AMCHAM are positively and significantly (p \ .05) related to higher corporate environmentalism. From the AMCHAM regression coefficient, it can be inferred that a 1 % increase in the probability of belonging to the AMCHAM increases the level of corporate environmentalism by .25 % score points. Firms with a higher probability of membership in TTCC have a negative but non-significant relationship with corporate environmentalism. These results provide support for the Hypothesis 1 argument that firms with membership in foreign-originated industry associations originally established in advanced industrialized countries (like the AMCHAM) are more likely to exhibit stronger corporate environmentalism than firms with membership in local industry associations established in developing countries (like the TTCC).

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.20*

.44**

.33**

.50**

.27**

.46**

.22*

.16

.16

.14

2 Log size of firm

3 Industry association membership

4 AMCHAM membership

5 TTCC membership

6 Foreign market dependence

7 Foreign joint ownership

8 State joint ownership

9 Industrial location

10 Community location

* Prob. \ .05; ** Prob. \ .01; N = 131

1.00

1 Industry sector

CE

Corporate environmentalism (CE)

Table 5 Correlation matrix

.11

.12

-.02

.14

.19*

.27**

.33**

.18*

.26**

1.00

1

.16

-.01

.09

.09

.28**

.37**

.32**

.29**

1.00

2

.09

.02

.06

.11

.16

.41**

.57**

1.00

3

.15

.10

.13

.19*

.30**

.41**

1.00

4

.04

.07

.05

.22*

.25**

1.00

5

.04

.16

.27**

.10*

1.00

6

.06

-.07

.30**

1.00

7

.02

.01

1.00

8

-.06

1.00

9

1.00

10

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Table 6 Probit regression analysis (stage 1): membership in industry associations

Table 7 OLS regression analysis (stage 2): corporate environmentalism

^ Prob \ .10; * prob \ .05; ** prob \ .01; *** prob \ .001 Standard errors are in parentheses

Model 1 (AMCHAM member)

Model 2 (TTCC member) -4.02 (.87)

Constant

-2.15 (.63)

Industry sector

.68 (.25)

.62 (.29)

Log size of firm

.31 (.14)

.61 (.17)

Dependence on foreign exports

.01* (.01)

.01 (.01)

Ownership: joint venture with foreign firm

.006 (.01)

.01* (.01)

Ownership: joint venture with state firm

.003 (.01)

-.001 (.01)

N

131

131

-2logL

181.54

164.36

Chi sq for covariates

150.32***

130.64***

% correctly classified

77.3

78.1

Model 3 Constant

24.57 (7.64)

Log size of firm

3.73* (1.87)

Prob. firm is AMCHAM member

25.38* (11.96)

Prob. firm is TTCC member

-10.97 (15.54)

Ownership: joint venture with foreign firm

.06 (.05)

Ownership: joint venture with state firm

.02 (.01)

Industrial location

3.88^ (2.09)

Community location

2.03 (2.24)

N

131

F value

9.37***

R squared

.31

Adjusted R squared

.28

Discussion The results suggest support for our hypothesis that firms with membership in MIAs affiliated to those in advanced industrialized countries, like the AMCHAM, are more likely to exhibit stronger corporate environmentalism than firms with membership in local industry associations, like the TTCC. The suggestion of this finding that AMCHAM organization membership may be linked to stronger corporate environmentalism is counter-intuitive when one considers that the arguable ‘‘anti-environmental’’ stance12 of the US Chamber of Commerce should have an influential effect on regional affiliates. 12

Over the last few years, several major multinational members have voiced displeasure over the Chamber’s environmental stance including California’s biggest utility corporations, Pacific Gas and Electric and Exelon; and Nike resigned from the executive but remains a member. General Electric and Johnson & Johnson have issued statements saying that they disagree with the chamber’s climate policy. Apple quit the Chamber altogether stating that, ‘‘We strongly object to the chamber’s recent comments opposing the EPA’s

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From a neo-institutional perspective, the findings of our study indicate that the institutional pressures exerted by the AMCHAM are more likely to be associated with stronger corporate environmentalism among its members than the pressures produced by the TTCC. To better explain the nature of the institutional pressures exerted by the AMCHAM and the TTCC, we conducted detailed follow-up interviews with executives and member firm representatives of both industry associations. These included face-to-face interviews with members of the AMCHAM HSE Committee and the TTCC Community Relations Committee who are top executives in the energy, oil and gas and chemical manufacturing fields. In many ways, the AMCHAM is an institutional entrepreneur in the way it directly and purposely implements mechanisms that support and encourage members’ corporate environmentalism. These include its Environment, Health and Safety (HSE) Committee, Annual HSE Conference and its regular environmental management publications. For nearly 15 years, the organizational structure of the AMCHAM has formally included an Environment, Health and Safety Committee. This committee comprises top environmental executives of member firms. It develops industry-wide environmental protection strategies, provides public comment and addresses the pressing environmental concerns of their membership. The TTCC has no such forum although its Corporate Social Responsibility Committee formed in 2008 undertakes environmental initiatives. The activities of this TTCC committee, so far, appear limited to philanthropic community activities rather than strategically directed at promoting environmental standards among members. The AMCHAM organizes a Health, Safety, and Environment Conference that has been held annually for the last 15 years. In 2010, this conference attracted over three hundred regional and international firms. AMCHAM also holds quarterly member training seminars. During 2009–2010, experts giving seminars included top scientists and engineers from GE Renewables and GE Energy, as well as a lead author of the Intergovernmental Panel on Climate Change (IPCC), and the top environmental executive of Petrobras Brazil. These activities may contribute to diverse environmental management collaborations, information exchanges, and discussion opportunities. There is little record of environmental training events for TTCC members even though the association suggests this to be part of its organizational strategy. The AMCHAM also emphasizes publication of environmental literature and dissemination to its members. Since 2006, every quarterly AMCHAM journal has contained an environmentally focused article by an academic or expert practitioner with one issue per year dedicated to health, safety and environment. In contrast, since 2006 one TTCC quarterly journal dedicated to water resources carried some environmental content and another in 2007 dealing with corporate transparency obliquely mentioned environmental information disclosure. Additionally, in its regularly published column in the Trinidad Guardian newspaper between 2007 and 2010, of its forty-three articles, only one focused specifically on environmental protection. But perhaps the more powerful mechanisms contributing to the creation and evolution of the AMCHAM institutional environment, so differentiated from others such as the TTCC are the indirect and sometimes less purposeful ways of doing things. These include the AMCHAM’s modus operandi of service bundling to members, entrenched international networks and member imaging. Firms join Chambers based on their needs for service benefits, their interest in the Chamber’s ‘‘unique selling point’’ if any and value as a collective for representational and Footnote 12 continued effort to limit greenhouse gases. … We would prefer that the chamber take a more progressive stance on this critical issue and play a constructive role in addressing the climate crisis.’’(Goldenberg 2009).

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lobbying purposes. Bundling of environmental services/information/opportunities with other Chamber lines of business is said to increase the ‘‘market penetration’’ of environmentalism among members. Where environmentalism is ‘‘sold’’ as a modular service/ opportunity to engage within the Chamber, there is less likelihood of penetration (Bratton et al. 2003). Here the contrast between AMCHAM and TTCC practices is apparent. While the AMCHAM bundles or integrates environmental messaging, tools and knowledge with its main business service lines, the TTCC (in earnest effort) takes a very modular approach. For example, AMCHAM executive seminars on topics like business risk would treat with environmental risk alongside financial and legal risk and are attended by CEOs. In other Chambers, such a topic is a ‘‘special’’ one not presented in the mainstream but in a ‘‘special session’’. The impact on top leaders becomes lost or diluted since member firms send their environmental personnel to attend, not the CEO. In the TTCC bundling efforts are less apparent and in two areas where ‘‘environmentalism’’ is part of an offering (i.e., the recently formed CSR committee and its community relations committee) it is summarily masked or muted. Of both industry associations, the AMCHAM exhibited older and stronger international networking relationships, especially with respect to the North American and European markets. Also, the AMCHAM network includes long-lasting linkages with foreign firms, experts, and partner associations in North America and Europe while the TTCC network is just beginning to emerge. This allows the AMCHAM to provide its member firms with more cutting edge advice, exposure, and learning opportunities; factors that are critical for successful adoption of environmental management practices (Collins and Roper 2005). While the TTCC is nationally respected, to a large extent, the AMCHAM is still considered the leading voice for the heavy industrial sectors. This high visibility and reputation allows the AMCHAM to have regular and easier access to top-level policymakers and prestigious national forums. This prominence and visibility may increase the expectations placed on AMCHAM members and increase scrutiny by NGOs and monitoring by regulators. It also works to reinforce normative pressures on firms with lower corporate environmentalism, by peer companies seeking to improve industry-wide ‘green’ reputation (May 2005). Table 8 summarizes evidence of the variation in engagement of the two industry associations in terms of networking and training opportunities; prioritization of environmentalism in committees; publication and dissemination intensities, and foreign expert interactions.

Conclusions This study contributes to the public policy literature by providing new empirical evidence about the relationship between different kinds of multi-sector IAs and corporate environmentalism. We also contribute to the small body of work examining institutional factors associated with corporate environmentalism in smaller economies in the developing world. Current emphasis on large developing countries such as China, India, and Mexico may be of little relevance to the unique environmental vulnerabilities and economic context of smaller emerging economies (Blechinger and Shah 2011; Shah et al. 2008). Our cross-sectional study of Trinidad and Tobago’s industry associations contributes to the literature by suggesting that, compared to non-members, firms with membership in industry associations in general do not show a statistically significant correlation with higher corporate environmentalism. We point out, however, that membership in a foreignoriginating industry association (like the AMCHAM) is more likely to be significantly

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Table 8 Corporate environmentalism engagement by industry associations American Chamber of Commerce of Trinidad and Tobago

Trinidad and Tobago Chamber of Industry & Commerce

Premier regional Conference on Health, Safety and Environment has been held for 13 years. In 2009 attracted over 300 regional and international firms Provides incentive for national recognition through Annual Health, Safety, Environment Awards for the last 10 years Under the HSE Committee, hosts industry training seminars, at least 1 per quarter, with international technical experts. For example, in 2009 some experts providing training were scientists from GE Renewables and GE Energy Hosts other environmental issue sensitization workshops regularly. For example, in 2009 one workshop was facilitated by the Lead Author of Chapter 7 of the IPCC Report on Climate Change and another by the top environmental executive of Petrobras Brazil Standing HSE Committee comprised of member firm HSE Executives; established over 15 years The quarterly publication to members used to disseminate environmental knowledge. All issues since 2006 have included an environmentally focused article by an academic expert or practitioner In each of the last 4 years, an additional special issue of the AMCHAM Quarterly has been published to cover health, safety and environment exclusively

Committee on Corporate Social Responsibility established two years ago; main focus on philanthropic initiatives including environmental projects Annual Awards ceremony for members includes a Community Award which may also cover environmental performance Although ‘‘Environmental Training’’ is stated in Strategic Plan, none have been hosted for members to date The TTCC publishes a bi-monthly column in the leading national newspaper, the Trinidad Guardian and in the last 43 columns between 2007–2009, only 1 article directly focuses on environmental responsibility Of the TTCC Quarterly members Journal, in recent years 1 issues in 2008 was dedicated to water management including pollution and another in 2007 was dedicated to Corporate Transparency which briefly touched on environmental information disclosure

correlated with stronger corporate environmentalism. These types of industry associations appear to exert stronger normative and mimetic institutional pressures associated with enhanced corporate environmentalism because they may: (1) have more access to information about the latest environmental management technology and practices; (2) be more aware of the newest and more stringent environmental preferences and standards developed in industrialized countries; (3) be more visible and thus receive stronger demands and oversight to push their members to show exemplary environmental protection conduct; and (4) be more able to diffuse new environmental protection technologies and demands by taking advantage of their central position within their network of members; and (5) be able to bundle the promotion of corporate environmentalism in with its mainstream business service offerings, thus increasing diffusion among membership. Public policy implications We posit that industry associations originating from industrialized countries may be enlisted as alternative public policy allies to promote environmental protection in emerging economies. This is particularly important in most such jurisdictions where governments usually lack strong capacity to enforce environmental regulations. While industry associations may have been identified as potential drivers of stronger corporate environmentalism by previous researchers (Hoffman 1999; King and Lenox 2000), not all industry associations are equal in this regard. IAs such as Chambers of Commerce could prove vital

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allies to government agencies in these countries that lack mechanisms to apply strong coercive pressures on industry. Since firms typically join Chambers of Commerce more so because of network and business pressures rather than for environmental goals means, the Chamber’s catchment of firms spans environmental leaders and laggards. Regulators may be able to partner with Chambers through whom they can indirectly impress environmental regulatory goals upon laggard firms, which regulators may have been unsuccessful in reaching through other means. The mediatorship of the Chamber could be more effective especially where in many circumstances, regulators and environmental laggard firms already have brittle relationships. MIAs can be encouraged by policy makers to develop more multi-stakeholder partnerships that complement regulation and build their capacity to guide members through the environmental regulatory system. This could potentially provide efficiency gains to environmental regulators use MIAs as intermediaries, thereby reducing government’s administrative burden. The AMCHAM becomes an institutional entrepreneur that focuses attention on how Chambers work to influence its institutional context through technical and market leadership and discursive action. In effect, AMCHAM overcomes barriers to collective action and achieves sustained collaboration among numerous dispersed actors to create an institution differentiated from the TTCC. Finally, policy makers should take note from the experiences of IAs. Specifically, while the AMCHAM does not ask members to sign a code of conduct that included environmental behaviour, as does the TTCC, it is the former whose members appear to be more environmentally responsible. This suggests that the actions of the AMCHAM, implemented both directly and indirectly may be better at inculcating environmental behavior in members than the signing of a symbolic code of conduct that involves neither enforcement nor sanctions. This evidence might also suggest that policy makers need not pursue IAs to implement certification schemes or increase coercion or sanctions for poor performers. Rather, it might be the very lack of these combined with the strong yet subtle actions integrated into the MIAs ‘‘business as usual’’ that makes the difference (Tashman and Rivera 2010). Limitations and future directions Finally, it must be noted that this study’s evidence is based on the oil, gas and chemical industries known to be some of the most pollution intensive sectors of the economy. So, while we speak in terms of ‘‘higher’’ and ‘‘lower’’ corporate environmentalism, this must be placed in relative context. Even the top rated, most responsible firms in this survey admitted to ‘‘one or two’’ non-compliance violations in the last year due to for example, plant malfunctions, supplier-related accidents or production inefficiencies. Similarly, we must note that we have not sought evidence here, nor have we found such that Trinidad’s IAs are ‘‘anti-environmental’’ in anyway, but rather, that one appears to have created more of an institutional environment to have a positive effect on members’ corporate environmentalism than the other. Another important limitation is reliance on a survey of stakeholders to measure corporate environmentalism. Our analysis is not based on actual environmental performance data such as air or water pollution levels but on the perception of performance that stakeholders hold based on observations and interpretations of the operations of each firm. When actual environmental performance data become available, future research can re-examine these relationships.

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