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Local regulatory anticipation and GHG emissions
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DOI：10.1002/smj.70097.png)
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Abstract
En 中文
Regulatory anticipation is a nonmarket response whereby firms, foreseeing future penalties, adjust their behavior when peers are targeted by regulators. Prior research defines peers using broad jurisdictional boundaries. Instead, I argue that regulatory anticipation may emerge locally, driven by two channels: proximity to peer scrutiny and firms' perceived sanction risks. Examining U.S. facilities' GHG emissions, I exploit variation in local-peer scrutiny arising from a change in the EPA's High-Priority-Violation policy. Difference-in-differences estimates show that heightened scrutiny of county peers is associated with 7% lower emissions among non-targeted firms, driven by those facing higher sanction risks. Distance-decay analyses indicate that these anticipation patterns weaken with geographic separation. The findings encourage managerial attention to local regulatory conditions and suggest that avoiding regulatory deserts could improve policy effectiveness.
Keywords:
climate change
environmental performance
geographic proximity
nonmarket strategies
regulation
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