Title: An empirical investigation of strategic compliance decisions in Argentinean polluting firms

Authors: Catherine Liston-Heyes; Diego Vazquez-Brust; Anthony Heyes

Addresses: École supérieure d'affaires publiques et internationales/Graduate School of Public and International Affairs, Université d'Ottawa/University of Ottawa, Pavillon des sciences sociales/Social Sciences Building, 120 Université (Room FSS6005), Ottawa, Ontario, K1N 6N5, Canada ' School of Management, Royal Holloway, University of London, Room MX16, Moore Annexe, Egham Hill, Egham, Surrey, TW20 0EX, UK ' Department of Economics, Université d'Ottawa/University of Ottawa, Pavillon des sciences sociales/Social Sciences Building, 120 Université (Room FSS6005), Ottawa, Ontario, K1N 6N5, Canada

Abstract: In choosing environmental compliance levels, firms make strategic decisions based on their expectations about how the intensity of the scrutiny they face from enforcement agencies will respond to their own - and perhaps others' - environmental performance. The objective of this paper is to provide insight into those expectations in Argentina - what they are and what influences them - and to interpret the results in the context of compliance incentives in developing economies. We report results based on a large-scale survey of polluting firms in Buenos Aires, Argentina. Amongst other things, we find that industry concentration, the social vulnerability of the surrounding community, and pessimistic attitudes to the general effectiveness of government regulations and/or about society's commitment to the environment weaken expectations of compliance externalities. On the other hand, beliefs in the competitive advantage of green technologies and a strong record of industry-wide compliance help support the development of compliance externalities associated with a responsive regulator.

Keywords: environmental regulation; environmental compliance; strategic compliance; enforcement; regulatory response; deterrence; emerging economies; Argentina; polluting firms; environmental pollution; environmental performance; industry concentration; social vulnerability; pessimistic attitudes.

DOI: 10.1504/LAJMSD.2014.059796

Latin American Journal of Management for Sustainable Development, 2014 Vol.1 No.1, pp.17 - 34

Received: 02 Aug 2013
Accepted: 03 Oct 2013

Published online: 12 Mar 2014 *

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