9 - Certified beyond-compliance and competitive advantage in developing countries

Summary

Besides evaluating how institutional factors and top manager characteristics are associated with business environmental protection practices, it is also critical to assess how these practices are associated with economic benefits (Khanna, 2001; Porter and van der Linde, 1995). This is particularly important for voluntary environmental programs such as those discussed in Chapters 5–8. Given their non-mandatory nature, voluntary initiatives that generate short-term economic gains increase the likelihood that participant firms may show more cooperation with environmental protection demands during the different stages of the policy process (Andrews, 1998). This chapter aims to evaluate whether higher performance in voluntary environmental programs is related to differentiation advantages that yield higher prices or higher sales for participants. It also seeks to identify key conditions that have to be met by voluntary programs in order to generate these differentiation advantages. As in Chapters 7 and 8, data were gathered from a sample of hotels participating in the Costa Rican Certification for Sustainable Tourism (CST). (See description of the CST and Costa Rica's tourism industry in Chapter 7.)

Results indicate that participation in the CST program alone is not significantly related to higher prices and higher sales. Only hotels with higher environmental performance show a significant relationship with price premiums.