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The impact of product market competition on workplace safety

Author

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  • Islam, Emdad
  • Loriot, Blake
  • Rahman, Lubna

Abstract

We investigate the impact of product market competition (PMC) on workplace health and safety violations. Our findings reveal that firms facing intense PMC have higher incidences of workplace safety standards violations and pay higher penalties for such offenses. By leveraging reductions in import tariffs as quasi-exogenous shocks, we demonstrate that competitive pressures significantly worsen these violations. The strategic orientations of firms, whether towards cost-cutting or product differentiation, markedly shape these outcomes. Furthermore, pressure from analysts amplifies the negative impact, while labor unionization helps mitigate these detrimental effects, highlighting the nuanced interplay between governance and market forces.

Suggested Citation

  • Islam, Emdad & Loriot, Blake & Rahman, Lubna, 2025. "The impact of product market competition on workplace safety," Journal of Corporate Finance, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:corfin:v:93:y:2025:i:c:s092911992500046x
    DOI: 10.1016/j.jcorpfin.2025.102778
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    Keywords

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    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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