Shaping Corporate Environmental Behavior and Performance: The Impact of Enforcement and Non-Enforcement Tools

EPA Grant Number: R828828
Title: Shaping Corporate Environmental Behavior and Performance: The Impact of Enforcement and Non-Enforcement Tools
Investigators: Earnhart, Dietrich H. , Haider-Markel, Donald , Glicksman, Robert , Ebihara, Tatsuji
Institution: University of Kansas
EPA Project Officer: Hahn, Intaek
Project Period: March 12, 2001 through March 11, 2004 (Extended to December 11, 2005)
Project Amount: $341,234
RFA: Corporate Environmental Performance and the Effectiveness of Government Interventions (2000) RFA Text |  Recipients Lists
Research Category: Environmental Justice


Our novel interdisciplinary research team will integrate the fields of economics, political science, law, and engineering management to determine the factors that shape corporate environmental behavior and performance (CEBP) at individual facilities in the industrial sector of chemical and allied products. Our overarching objective is to determine and isolate the effects of various government interventions: inspections, federal fines, federal injunctive relief and supplemental environmental projects (SEPs), and state fines. We will measure environmental behavior by the extent of treatment, auditing, and environmental management system (EMS). We will measure environmental performance by wastewater discharges and the compliance rate with effluent limits. As specific objectives, we will identify the differential effects of government interventions, effects of general deterrence and enforcement approach, interactions between government interventions and facility characteristics (especially EPA status of "major/minor" discharger), and the influences of community pressure and firm financial status. We will also test empirically a theory of specific deterrence.


To achieve these objectives, we will gather data on environmental performance and government interventions from EPA and state agency databases and environmental behavior from an original survey of all 512 "major" chemical facilities and a random sample of 500 "minor" facilities. We will econometrically analyze these data to estimate the relationships between CEBP and government interventions, while controlling for general deterrence, enforcement approach, and community pressure, within a simultaneous equations system. To test a theory of specific deterrence, we will examine responses to hypothetical scenarios included in the survey of facilities.

Expected Results:

We expect to establish the following key results: (1) statistically supportable links between certain government interventions and CEBP and statistically significant differences among the effects of individual government interventions; (2) the effects of government interventions depending significantly on facility characteristics; (3) the sources of specific deterrence as increases in future penalty likelihood and/or size relative to the initial penalty likelihood and size; and (4) the importance of EMS protocols and community pressure. These results will generate benefits for state regulators and chemical manufacturers by permitting both parties to reduce discharges more effectively. In particular, state regulators will better understand how to use monitoring and enforcement tools to induce less non-compliance and greater compliance. Manufacturers will better understand how to improve environmental performance at their facilities.

Publications and Presentations:

Publications have been submitted on this project: View all 18 publications for this project

Supplemental Keywords:

water, discharge, survey, socio-economic, enforcement, monitoring, engineering, law, chemical and allied products (2-digit SIC code 28), Heckman two-stage estimation,, RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Sustainable Industry/Business, Economics, Corporate Performance, Economics and Business, decision-making, Social Science, Economics & Decision Making, Environmental Law, environmental performance, SEPs, environmental management systems (EMS), policy analysis, deterrence, compliance assistance, enforcement strategy, policy making, government intervention, incentives, decision making, environmental decision making, corporate compliance, environmental compliance determinants, socioeconomics, economic incentives, enforcement, environmental policy, air & water pollution regulations, Laws, environmental behavior, regulations, enforcement impact, EMS, legal and policy choices, public policy, regulatory impact, corporate environmental behavior

Progress and Final Reports:

  • 2001 Progress Report
  • 2002 Progress Report
  • 2003 Progress Report
  • 2004 Progress Report
  • Final Report