Firm Decision-making Structure and Compliance with Environmental Regulations: Evidence from Environmental Auditing
AbstractWe explore how limits to our insight on the underlying decision-making structure of regulated entities may affect the conclusions we draw about the likely impacts of environmental policies, with a focus on environmental auditing. We examine the conditions under which a multi-facility firm chooses to adopt a standardized auditing. Our firm-level empirical analysis confirms that a uniform auditing outcome is less likely among firms (1) with a more heterogeneous portfolio of facilities, and (2) that are less likely to make decision errors. We examine the implications of adding controls for firm decision-making structure in a facility-level empirical analysis of auditing’s impact on compliance. Our results suggest that the estimated compliance impact of auditing varies depending on whether or not we include these controls.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, College of William and Mary in its series Working Papers with number 124.
Length: 32 pages
Date of creation: 25 Aug 2012
Date of revision:
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Friesen, Lana, 2006. "The social welfare implications of industry self-auditing," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 280-294, May.
- Alexander Pfaff & Chris William Sanchirico, 2004.
"Big field, small potatoes: An empirical assessment of EPA's self-audit policy,"
Journal of Policy Analysis and Management,
John Wiley & Sons, Ltd., vol. 23(3), pages 415-432.
- Alexander & Chris William Sanchirico & John Lee & Daniel Prager, 2002. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Discussion Papers 0102-55, Columbia University, Department of Economics.
- Shimshack, Jay P. & Ward, Michael B., 2005.
"Regulator reputation, enforcement, and environmental compliance,"
25994, University Library of Munich, Germany.
- Shimshack, Jay P. & Ward, Michael B., 2005. "Regulator reputation, enforcement, and environmental compliance," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 519-540, November.
- Mary F. Evans & Lirong Liu & Sarah L. Stafford, 2008. "Do Environmental Audits Improve Long-term Compliance? Evidence from Manufacturing Facilities in Michigan," Working Papers 78, Department of Economics, College of William and Mary, revised 25 Sep 2011.
- Michael W. Toffel, 2008. "Coerced Confessions: Self-Policing in the Shadow of the Regulator," Journal of Law, Economics and Organization, Oxford University Press, vol. 24(1), pages 45-71, May.
- Mary Evans & Lirong Liu & Sarah Stafford, 2011. "Do environmental audits improve long-term compliance? Evidence from manufacturing facilities in Michigan," Journal of Regulatory Economics, Springer, vol. 40(3), pages 279-302, December.
- Wilde, Joachim, 2000. "Identification of multiple equation probit models with endogenous dummy regressors," Economics Letters, Elsevier, vol. 69(3), pages 309-312, December.
- Laplante, Benoit & Rilstone, Paul, 1996. "Environmental Inspections and Emissions of the Pulp and Paper Industry in Quebec," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 19-36, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daifeng He) or (Alfredo Pereira).
If references are entirely missing, you can add them using this form.