Firm Decision-making Structure and Compliance with Environmental Regulations: Evidence from Environmental Auditing
We 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.
|Date of creation:||25 Aug 2012|
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- Shimshack, Jay P. & Ward, Michael B., 2005.
"Regulator reputation, enforcement, and environmental compliance,"
25994, University Library of Munich, Germany.
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- 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.
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- Wilde, Joachim, 2000. "Identification of multiple equation probit models with endogenous dummy regressors," Economics Letters, Elsevier, vol. 69(3), pages 309-312, December.
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