IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v248y2022ics0925527322000743.html
   My bibliography  Save this article

Safety regulation enforcement and production safety: The role of penalties and voluntary safety management systems

Author

Listed:
  • Fan, Di
  • Yeung, Andy C.L.
  • Yiu, Daphne W.
  • Lo, Chris K.Y.

Abstract

Scholars, government, and the public expect that legal enforcement should be an effective means to prevent a firm's future safety violation behavior in daily productions. However, the literature provides limited insights into whether safety regulation enforcement is effective in helping firms reduce future safety violations. Therefore, this study examines the relationship between occupational health and safety enforcement and a firm's future violation behavior. We carried out a regression analysis based on a panel sample of 2965 listed United States manufacturers with 4474 violation records issued by the Occupational Safety and Health Administration. We find limited effectiveness of enforcement. Our results indicate that although past violation experiences are negatively correlated with subsequent repeat violations (violations of the same clause), they are positively correlated with non-repeat violations (violations of a different clause) and the number of overall violations (the sum of both). The factors that can reinforce effectiveness are also explored in this study. Our analyses show that the effectiveness of safety regulation enforcement is significantly enhanced when reinforced by stringent penalties and Occupational Health and Safety Assessment Series 18001 certifications. This study contributes to the literature on the operational safety and policy–operations interaction. We challenge conventional wisdom by proposing that regulatory pressures do not necessarily improve firms' overall social responsibility practices in terms of worker health and safety. We also discuss the implications of this for the occupational health and safety (OHS) management practice.

Suggested Citation

  • Fan, Di & Yeung, Andy C.L. & Yiu, Daphne W. & Lo, Chris K.Y., 2022. "Safety regulation enforcement and production safety: The role of penalties and voluntary safety management systems," International Journal of Production Economics, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:proeco:v:248:y:2022:i:c:s0925527322000743
    DOI: 10.1016/j.ijpe.2022.108481
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527322000743
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2022.108481?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Athanasios Rentizelas & Ana Beatriz Lopes Sousa Jabbour & Ahmed Darwish Al Balushi & Andrea Tuni, 2020. "Social sustainability in the oil and gas industry: institutional pressure and the management of sustainable supply chains," Annals of Operations Research, Springer, vol. 290(1), pages 279-300, July.
    2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    3. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    4. Clemens, Bruce & Douglas, Thomas J., 2006. "Does coercion drive firms to adopt 'voluntary' green initiatives? Relationships among coercion, superior firm resources, and voluntary green initiatives," Journal of Business Research, Elsevier, vol. 59(4), pages 483-491, April.
    5. Wei Shi & Brian L. Connelly & Robert E. Hoskisson, 2017. "External corporate governance and financial fraud: cognitive evaluation theory insights on agency theory prescriptions," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1268-1286, June.
    6. Yun Wang & Yanxi Li & Zhuang Ma & Jinbo Song, 2019. "The Deterrence Effect of a Penalty for Environmental Violation," Sustainability, MDPI, vol. 11(15), pages 1-19, August.
    7. Osama A. Meqdadi & Thomas E. Johnsen & Rhona E. Johnsen, 2019. "Power and Diffusion of Sustainability in Supply Networks: Findings from Four In-Depth Case Studies," Journal of Business Ethics, Springer, vol. 159(4), pages 1089-1110, November.
    8. Osama Meqdadi & Thomas Johnsen & Rhona Johnsen, 2019. "Power and Diffusion of Sustainability in Supply Networks: Findings from Four In-Depth Case Studies," Post-Print hal-02421308, HAL.
    9. Paul Ingram & Joel A. C. Baum, 1997. "Opportunity And Constraint: Organizations’ Learning From The Operating And Competitive Experience Of Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 75-98, July.
    10. Daniel A. Levinthal & James G. March, 1993. "The myopia of learning," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 95-112, December.
    11. Jelle Vries & René Koster & Daan Stam, 2016. "Safety Does Not Happen by Accident: Antecedents To A Safer Warehouse," Production and Operations Management, Production and Operations Management Society, vol. 25(8), pages 1377-1390, August.
    12. Yang, Yang & Jia, Fu & Chen, Lujie & Wang, Yichuan & Xiong, Yu, 2021. "Adoption timing of OHSAS 18001 and firm performance: An institutional theory perspective," International Journal of Production Economics, Elsevier, vol. 231(C).
    13. Ling Li & Perry Singleton, 2019. "The Effect of Workplace Inspections on Worker Safety," ILR Review, Cornell University, ILR School, vol. 72(3), pages 718-748, May.
    14. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    15. Scholz, John T & Gray, Wayne B, 1990. "OSHA Enforcement and Workplace Injuries: A Behavioral Approach to Risk Assessment," Journal of Risk and Uncertainty, Springer, vol. 3(3), pages 283-305, September.
    16. Wayne B. Gray & Jay P. Shimshack, 2011. "The Effectiveness of Environmental Monitoring and Enforcement: A Review of the Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 3-24, Winter.
    17. Mark Pagell & Mary Parkinson & Anthony Veltri & John Gray & Frank Wiengarten & Michalis Louis & Brian Fynes, 2020. "The Tension Between Worker Safety and Organization Survival," Management Science, INFORMS, vol. 66(10), pages 4863-4878, October.
    18. W. Kip Viscusi, 1979. "The Impact of Occupational Safety and Health Regulation," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 117-140, Spring.
    19. John W. Ruser & Robert S. Smith, 1991. "Reestimating Osha's Effects: Have the Data Changed?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 212-235.
    20. Franses, Ph.H.B.F. & Slagter, E. & Cramer, J.S., 1999. "Censored regression analysis in large samples with many zero observations," Econometric Institute Research Papers EI 9939-A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    21. Daphne W. Yiu & Yuehua Xu & William P. Wan, 2014. "The Deterrence Effects of Vicarious Punishments on Corporate Financial Fraud," Organization Science, INFORMS, vol. 25(5), pages 1549-1571, October.
    22. Fan, Di & Lo, Chris K.Y. & Ching, Vincent & Kan, C.W., 2014. "Occupational health and safety issues in operations management: A systematic and citation network analysis review," International Journal of Production Economics, Elsevier, vol. 158(C), pages 334-344.
    23. Claire Senot & Aravind Chandrasekaran & Peter T. Ward & Anita L. Tucker & Susan D. Moffatt-Bruce, 2016. "The Impact of Combining Conformance and Experiential Quality on Hospitals’ Readmissions and Cost Performance," Management Science, INFORMS, vol. 62(3), pages 829-848, March.
    24. Wayne B. Gray & John M. Mendeloff, 2005. "The Declining Effects of Osha Inspections on Manufacturing Injuries, 1979–1998," ILR Review, Cornell University, ILR School, vol. 58(4), pages 571-587, July.
    25. Pamela R. Haunschild & Mooweon Rhee, 2004. "The Role of Volition in Organizational Learning: The Case of Automotive Product Recalls," Management Science, INFORMS, vol. 50(11), pages 1545-1560, November.
    26. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    27. Tang, Christopher S. & Zhou, Sean, 2012. "Research advances in environmentally and socially sustainable operations," European Journal of Operational Research, Elsevier, vol. 223(3), pages 585-594.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhao, Zichao & Li, Dexuan & Dai, Wensheng, 2023. "Machine-learning-enabled intelligence computing for crisis management in small and medium-sized enterprises (SMEs)," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    2. El Baz, Jamal & Ruel, Salomée & Jebli, Fedwa, 2023. "Harnessing supply chain resilience and social performance through safety and health practices in the COVID-19 era: An investigation of normative pressures and adoption timing's role," International Journal of Production Economics, Elsevier, vol. 264(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fan, Di & Lo, Chris K.Y. & Zhou, Yi, 2021. "Sustainability risk in supply bases: The role of complexity and coupling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    2. Tammy L. Madsen & Michael J. Leiblein, 2015. "What Factors Affect the Persistence of an Innovation Advantage?," Journal of Management Studies, Wiley Blackwell, vol. 52(8), pages 1097-1127, December.
    3. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    4. Birthal, Pratap S. & Hazrana, Jaweriah, 2019. "Crop diversification and resilience of agriculture to climatic shocks: Evidence from India," Agricultural Systems, Elsevier, vol. 173(C), pages 345-354.
    5. Alm, James & Shimshack, Jay, 2014. "Environmental Enforcement and Compliance: Lessons from Pollution, Safety, and Tax Settings," Foundations and Trends(R) in Microeconomics, now publishers, vol. 10(4), pages 209-274, December.
    6. Emma L. Schultz & David T. Tan & Kathleen D. Walsh, 2010. "Endogeneity and the corporate governance - performance relation," Australian Journal of Management, Australian School of Business, vol. 35(2), pages 145-163, August.
    7. Anja Bondebjerg & Trine Filges & Jan Hyld Pejtersen & Malene Wallach Kildemoes & Hermann Burr & Peter Hasle & Emile Tompa & Elizabeth Bengtsen, 2023. "Occupational health and safety regulatory interventions to improve the work environment: An evidence and gap map of effectiveness studies," Campbell Systematic Reviews, John Wiley & Sons, vol. 19(4), December.
    8. Claire Senot & Aravind Chandrasekaran & Peter T. Ward & Anita L. Tucker & Susan D. Moffatt-Bruce, 2016. "The Impact of Combining Conformance and Experiential Quality on Hospitals’ Readmissions and Cost Performance," Management Science, INFORMS, vol. 62(3), pages 829-848, March.
    9. Alfonso Mendoza-Velázquez & Luis Carlos Ortuño-Barba & Luis David Conde-Cortés, 2022. "Corporate governance and firm performance in hybrid model countries," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 21(1), pages 32-58, February.
    10. Kampelmann, Stephan & Rycx, François, 2012. "The impact of educational mismatch on firm productivity: Evidence from linked panel data," Economics of Education Review, Elsevier, vol. 31(6), pages 918-931.
    11. Zheng, Xinye & Li, Fanghua & Song, Shunfeng & Yu, Yihua, 2013. "Central government's infrastructure investment across Chinese regions: A dynamic spatial panel data approach," China Economic Review, Elsevier, vol. 27(C), pages 264-276.
    12. Martin Andersson & Hans Lööf, 2009. "Learning‐by‐Exporting Revisited: The Role of Intensity and Persistence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 893-916, December.
    13. Tadadjeu, Sosson & Njangang, Henri & Asongu, Simplice A. & Kamguia, Brice, 2023. "Natural resources, child mortality and governance quality in African countries," Resources Policy, Elsevier, vol. 83(C).
    14. Abdelraouf, Nadine & Noureldin, Diaa, 2022. "The impact of the exchange rate regime on the dispersion of the price-change distribution: Evidence from a large panel of countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 76(C).
    15. Benoît Mahy & François Rycx & Guillaume Vermeylen & Mélanie Volral, 2022. "Productivity and wage effects of firm‐level upstreamness: Evidence from Belgian linked panel data," The World Economy, Wiley Blackwell, vol. 45(7), pages 2222-2250, July.
    16. Bai-Chen Xie & Jie Gao & Shuang Zhang & ZhongXiang Zhang, 2017. "What Factors Affect the Competiveness of Power Generation Sector in China? An Analysis Based on Game Cross-efficiency," Working Papers 2017.12, Fondazione Eni Enrico Mattei.
    17. Claire Giordano, 2023. "Revisiting the real exchange rate misalignment‐economic growth nexus via the across‐sector misallocation channel," Review of International Economics, Wiley Blackwell, vol. 31(4), pages 1329-1384, September.
    18. Fendel Tanja, 2016. "Migration and Regional Wage Disparities in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 3-35, February.
    19. Bongsuk Sung & Myung-Bae Yeom & Hong-Gi Kim, 2017. "Eco-Efficiency of Government Policy and Exports in the Bioenergy Technology Market," Sustainability, MDPI, vol. 9(9), pages 1-18, September.
    20. Quader, Syed Manzur, 2017. "Differential effect of liquidity constraints on firm growth," Review of Financial Economics, Elsevier, vol. 32(C), pages 20-29.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:248:y:2022:i:c:s0925527322000743. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.