IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v17y2006i6p677-690.html
   My bibliography  Save this article

The Role of Private Decentralized Institutions in Sustaining Industry Self-Regulation

Author

Listed:
  • Michael J. Lenox

    () (Fuqua School of Business, Duke University, P.O. Box 90120, Durham, North Carolina 27708)

Abstract

An emerging body of institutional scholarship emphasizes the role played by private decentralized institutions in facilitating collective action among organizations. However, these institutions often suffer from free riding and opportunism. This may lead firms to exit the institution and eventually cause its collapse. In this paper, we explore how private decentralized institutions may be sustained despite these problems. We focus on one form of private decentralized institution---trade association--sponsored industry self-regulatory programs. We advance two alternative hypotheses to explain the sustained existence of industry self-regulatory institutions: (a) Firms participate to gain a participation-contingent benefit, and (b) firms participate to maintain a generally beneficial institution. Using a 10-year panel of data from the chemical industry, we find evidence consistent with the latter hypothesis for at least one prominent example of self-regulation. Our findings have implications for both specific models of industry self-regulation and general theories of collective action.

Suggested Citation

  • Michael J. Lenox, 2006. "The Role of Private Decentralized Institutions in Sustaining Industry Self-Regulation," Organization Science, INFORMS, vol. 17(6), pages 677-690, December.
  • Handle: RePEc:inm:ororsc:v:17:y:2006:i:6:p:677-690
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.1060.0211
    Download Restriction: no

    References listed on IDEAS

    as
    1. Blacconiere, Walter G. & Patten, Dennis M., 1994. "Environmental disclosures, regulatory costs, and changes in firm value," Journal of Accounting and Economics, Elsevier, vol. 18(3), pages 357-377, November.
    2. Andrew King, 1999. "Retrieving and Transferring Embodied Data: Implications for the Management of Interdependence Within Organizations," Management Science, INFORMS, vol. 45(7), pages 918-935, July.
    3. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
    4. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 1-19.
    5. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    7. Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
    8. Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
    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. Kuckertz, Andreas & Wagner, Marcus, 2010. "The influence of sustainability orientation on entrepreneurial intentions -- Investigating the role of business experience," Journal of Business Venturing, Elsevier, vol. 25(5), pages 524-539, September.
    2. repec:kap:jbuset:v:143:y:2017:i:4:d:10.1007_s10551-016-3077-y is not listed on IDEAS
    3. Dror Etzion, 2014. "Diffusion as Classification," Organization Science, INFORMS, vol. 25(2), pages 420-437, April.
    4. repec:bla:stratm:v:37:y:2016:i:12:p:2425-2440 is not listed on IDEAS
    5. repec:kap:jbuset:v:143:y:2017:i:4:d:10.1007_s10551-016-3075-0 is not listed on IDEAS
    6. repec:bla:stratm:v:38:y:2017:i:7:p:1373-1390 is not listed on IDEAS
    7. Jeffrey G. York & Michael J. Lenox, 2014. "Exploring the sociocultural determinants of de novo versus de alio entry in emerging industries," Strategic Management Journal, Wiley Blackwell, vol. 35(13), pages 1930-1951, December.
    8. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    9. Joseph T. Mahoney & Anita M. McGahan & Christos N. Pitelis, 2009. "Perspective ---The Interdependence of Private and Public Interests," Organization Science, INFORMS, vol. 20(6), pages 1034-1052, December.
    10. Cave, Jonathan & Marsden, Christopher, 2008. "Quis custodiet ipsos custodies in the Internet: self-regulation as a threat and a promise," MPRA Paper 83193, University Library of Munich, Germany.
    11. Michael W. Toffel & Jodi L. Short, 2011. "Coming Clean and Cleaning Up: Does Voluntary Self-Reporting Indicate Effective Self-Policing?," Journal of Law and Economics, University of Chicago Press, vol. 54(3), pages 609-649.
    12. Kira J M Matus, 2009. "Standardization, Certification and Labeling: Lessons from Theory and Practice," CID Working Papers 37, Center for International Development at Harvard University.
    13. repec:bla:stratm:v:38:y:2017:i:1:p:114-140 is not listed on IDEAS

    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:inm:ororsc:v:17:y:2006:i:6:p:677-690. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthew Walls). General contact details of provider: http://edirc.repec.org/data/inforea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.