IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/1806.html
   My bibliography  Save this paper

Firms' Choice of Regulation Instruments to Reduce Pollution: A Tansaction Cost Approach

Author

Listed:
  • Delmas, Magali

    (U of California, Santa Barbara and Stanford U)

  • Marcus, Alfred

    (U of Minnesota)

Abstract

This paper extends transaction costs economics to analyze relationships between firms and regulatory agencies. It compares the economic efficiency of firm-agency governance structures for dealing with pollution reduction. The transaction costs of three ideal type governance structures are analyzed: command and control regulation, market based mechanisms, and negotiated agreements. We propose that the choice of governance structure will depend on the strategies firms are pursuing given their transaction attributes and market opportunities.

Suggested Citation

  • Delmas, Magali & Marcus, Alfred, 2003. "Firms' Choice of Regulation Instruments to Reduce Pollution: A Tansaction Cost Approach," Research Papers 1806, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:1806
    as

    Download full text from publisher

    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1806.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Delmas, Magali A, 1999. "Exposing Strategic Assets to Create New Competencies: The Case of Technological Acquisition in the Waste Management Industry in Europe and North America," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 8(4), pages 635-671, December.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(2), pages 387-409, October.
    4. Magali Delmas & Bruce Heiman, 2001. "Government Credible Commitment to the French and American Nuclear Power Industries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(3), pages 433-456.
    5. Oliver Williamson, 1970. "Administrative Decision Making and Pricing: Externality and Compensation Analysis Applied," NBER Chapters, in: The Analysis of Public Output, pages 115-138, National Bureau of Economic Research, Inc.
    6. Levy, Brian & Spiller, Pablo T, 1994. "The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunications Regulation," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(2), pages 201-246, October.
    7. Tietenberg, T H, 1990. "Economic Instruments for Environmental Regulation," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(1), pages 17-33, Spring.
    8. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
    9. Krupnick, Alan & Mazurek, Janice & Boyd, James, 1998. "Intel's XL Permit: A Framework for Evaluation," RFF Working Paper Series dp-98-11, Resources for the Future.
    10. Noorderhaven, N.G., 1996. "How to make transaction cost economics more balanced and realistic," Other publications TiSEM 5defaade-4563-4df5-84d4-e, Tilburg University, School of Economics and Management.
    11. Williamson, Oliver E, 1984. "Credible Commitments: Further Remarks," American Economic Review, American Economic Association, vol. 74(3), pages 488-490, June.
    12. Stavins, Robert N., 1998. "Market-Based Environmental Policies," Discussion Papers 10506, Resources for the Future.
    13. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    14. Jack A. Nickerson & Barton H. Hamilton & Tetsuo Wada, 2001. "Market position, resource profile, and governance: linking Porter and Williamson in the context of international courier and small package services in Japan," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 251-273, March.
    15. Bruce Heiman & Jack Nickerson, 2002. "Towards Reconciling Transaction Cost Economics and the Knowledge-based View of the Firm: The Context of Interfirm Collaborations," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 97-116.
    16. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, March.
    17. Julius Margolis, 1970. "The Analysis of Public Output," NBER Books, National Bureau of Economic Research, Inc, number marg70-1, October.
    18. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 8, pages 499-589, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stavins, Robert & Hahn, Robert & Cavanagh, Sheila, 2001. "National Environmental Policy During the Clinton Years," RFF Working Paper Series dp-01-38, Resources for the Future.
    2. Stavins, Robert, 2004. "Environmental Economics," RFF Working Paper Series dp-04-54, Resources for the Future.
    3. Mogens Justesen & Peter Kurrild-Klitgaard, 2014. "Erratum to: Institutional interactions and economic growth: the joint effects of property rights, veto players and democratic capital," Public Choice, Springer, vol. 160(1), pages 291-291, July.
    4. Lynn Mainwaring & Richard Jones & David Blackaby, 2006. "Devolution, sustainability and GDP convergence: Is the Welsh agenda achievable?," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 679-689.
    5. Paul L. Joskow & Roger G. Noll, 1981. "Regulation in Theory and Practice: An Overview," NBER Chapters, in: Studies in Public Regulation, pages 1-78, National Bureau of Economic Research, Inc.
    6. Stavins, Robert N., 2003. "Environmental Protection and Economic Well-Being: How Does (and How Should) Government Balance These Two Important Values?," Discussion Papers 10565, Resources for the Future.
    7. Delmas, Magali & Tokat, Yesim, 2003. "Deregulation Process, Governance Structures and Efficiency: The U.S. Electric Utility Sector," Research Papers 1790, Stanford University, Graduate School of Business.
    8. Georges A. Tanguay & Paul Lanoie & Jérôme Moreau, 2001. "Environmental Policy, Public Interest and Political Market," Cahiers de recherche 01-01, HEC Montréal, Institut d'économie appliquée.
    9. Barclay E. James & Paul M. Vaaler, 2017. "Experience, Equity and Foreign Investment Risk: A PIC Perspective," Management International Review, Springer, vol. 57(2), pages 209-241, April.
    10. Paul Lanoie & Jérôme Moreau & Georges A. Tanguay, 2001. "Environmental Policy, Public Interest and Political Market," CIRANO Working Papers 2001s-37, CIRANO.
    11. Mogens Justesen & Peter Kurrild-Klitgaard, 2013. "Institutional interactions and economic growth: the joint effects of property rights, veto players and democratic capital," Public Choice, Springer, vol. 157(3), pages 449-474, December.
    12. Na Li Dawson & Kathleen Segerson, 2008. "Voluntary Agreements with Industries: Participation Incentives with Industry-Wide Targets," Land Economics, University of Wisconsin Press, vol. 84(1), pages 97-114.
    13. Stavins, Robert, 2001. "Lessons From the American Experiment With Market-Based Environmental Policies," RFF Working Paper Series dp-01-53, Resources for the Future.
    14. Chen, Chunhua & Jiang, Dequan & Lan, Meng & Li, Weiping & Ye, Ling, 2022. "Does environmental regulation affect labor investment Efficiency?Evidence from a quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 82-95.
    15. Vanessa Oltra & Maïder Saint Jean, 2007. "Incrementalism of environmental innovations versus paradigmatic change: a comparative study of the automotive and chemical industries," Post-Print hal-00155039, HAL.
    16. Chen, Jianqiang & Hsieh, Pei-Fang & Hsu, Po-Hsuan & Levine, Ross, 2025. "Environmental liabilities, borrowing costs, and pollution prevention activities: The nationwide impact of the Apex Oil ruling," Journal of Corporate Finance, Elsevier, vol. 91(C).
    17. Winston Harrington & Richard D. Morgenstern & Peter Nelson, 2000. "On the accuracy of regulatory cost estimates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 297-322.
    18. Forest L. Reinhardt & Robert N. Stavins & Richard H. K. Vietor, 2008. "Corporate Social Responsibility Through an Economic Lens," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 219-239, Summer.
    19. Robert Inman & Daniel Rubinfeld, 2002. "Subsidiarity, governance, and EU economic policy," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(04), pages 3-11, October.
    20. Glen Dowell & Stuart Hart & Bernard Yeung, 1999. "Do Corporate Global Environmental Standards in Emerging Markets Create Or Destroy Market Value," William Davidson Institute Working Papers Series 259, William Davidson Institute at the University of Michigan.

    More about this item

    Statistics

    Access and download statistics

    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:ecl:stabus:1806. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gsstaus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.