Inefficient NGO labels: Strategic proliferation and fragmentation in the market for certification

Anthony Heyes, Steve Martin

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


Nongovernmental organization (NGO) certification is a prerequisite for corporate engagement in enhanced social behaviors in many settings. Labels with broad scope (like “sustainability”) coexist with niche competitors much narrower in scope (like “bird-friendliness”). When NGOs compete for adoptions, the wrong suite of schemes emerges, providing a rationale for regulation. An incumbent NGO may strategically narrow the breadth of its label to deter entry of competing schemes, reducing welfare. Even when entry is accommodated, welfare is compromised. Modeling multi-issue competition between NGOs allows us to be the first to analyze label fragmentation and provide a novel perspective on proliferation that has frustrated practitioners.

Original languageEnglish
Pages (from-to)206-220
Number of pages15
JournalJournal of Economics and Management Strategy
Issue number2
Publication statusPublished - 1 Jun 2018

Bibliographical note

Funding Information:
2Department of Economics, University of Sussex, Brighton, UK Heyes gratefully acknowledges financial support from CRC and SSHRC under Insight Grant 435-2012-472. Martin acknowledges financial support from SSHRC through its Canadian Graduate Scholarship program. We are grateful to Sandeep Kapur (London), Mike Abito (Wharton), seminar participants at University College London, and the 14th Annual IIOC in Philadelphia, as well as two anonymous referees and a coeditor of this journal for helpful comments. Errors are ours.

Publisher Copyright:
© 2017 Wiley Periodicals, Inc.

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


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