Andrea M. Prado
New York University, Stern School of Business
Choosing among competing environmental and labour certifications: Social impact, commercial value or both

aprado@stern.nyu.edu

Andrea Prado is a PhD Candidate in strategy at the Stern School of Business. Her areas of specialization include the dynamics among competing self-regulatory institutions and the consequences for firm performance and society at large. In the last decade, there has been a rapid increase in the development of environmental and labor standards such as Fair Trade, the Rainforest Alliance and others, but it is not clear how producers choose between such standards, or whether the competition between these standards improves social welfare. In her dissertation, Andrea investigates how different environmental and labor standards compete in an industry, and how that competition affects social outcomes. Andrea holds a MSc. in International Economics from University of Essex and a BSc. in Economics from Universidad de Costa Rica. She was awarded the Chevening scholarship from the British government and the Fulbright scholarships from the American government for her graduate studies.

Choosing among competing environmental and labor certifications: Social impact, commercial value or both

In the last decade there has been a proliferation of environmental and labor certifications in many industries. These certifications help decrease the asymmetric information between producers and their exchange partners by providing information about the production process that is not observed by buyers or consumers. In an industry where there are multiple certification programs operating, this paper studies how are producers choosing among competing standards by analyzing the effects the technical and commercial characteristics of the certification programs in the decision to adopt. Certifications have two characteristics: stringency of the technical norm and commercial value. Not necessarily the most stringent certifications are the most rewarded in the market place. In this context, I show that producers are more likely to adopt less stringent and more commercially valuable certifications. The empirical context of the study is the floral industry in Colombia and Ecuador.