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Effectiveness of regulatory interventions on firm behavior

Author

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  • Huizingh, Eelko
  • Mulder, Machiel

    (Groningen University)

Abstract

Economic regulators use a number of instruments to change the behavior of economic agents, but only limited evidence exists on the effectiveness of such regulatory interventions. We conduct a randomized field experiment to determine the effects of two interventions aimed at e-commerce firms by a regulatory authority in order to let these firms meet legal obligations regarding information disclosure to protect consumer interests. We measure the compliance behavior of e-commerce firms in both a treatment group and a control group before and after two interventions. The first regulatory intervention concerns sending personalized letters to firms (firm-specific guidance), whereas the second intervention includes a number of dedicated publications and presentations by the regulatory authority (industry guidance). We find that both of these interventions have hardly any effect, neither in the short term nor in the long term. We conclude that regulatory interventions in the form of providing only guidance on the legal rules to firms are not effective strategies to influence their behavior.

Suggested Citation

  • Huizingh, Eelko & Mulder, Machiel, 2014. "Effectiveness of regulatory interventions on firm behavior," Research Report 14011-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    • Handle: RePEc:gro:rugsom:14011-eef
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    File URL: http://hdl.handle.net/11370/18ef4e77-b949-469e-9afe-bd3f3e0e325d
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    References listed on IDEAS

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    Cited by:

    1. Rob J. M. Alessie & Peter T. Dijkstra & Ron Kemp & Annemieke Tuinstra & Jarig Sinderen, 2018. "Impact Assessment of Competition Policies and Regulation: 10 Years’ Experience from the Office of the Chief Economist in the Netherlands," De Economist, Springer, vol. 166(1), pages 1-6, March.
    2. Paola Valbonesi & Federico Biagi, 2016. "Incentivising Innovation and Adoption of ICT: ICT Innovation Voucher Programmes," JRC Research Reports JRC104057, Joint Research Centre.

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