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Title:Role of Environmental Self -Auditing and Audit Policies in Regulatory Compliance
Author(s):Widyawati, Diah
Doctoral Committee Chair(s):Khanna, Madhu
Department / Program:Agricultural and Consumer Economics
Discipline:Agricultural and Consumer Economics
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Environmental Sciences
Abstract:We examine the effect of voluntary efforts to self-audit on compliance with Clean Air Act regulations. It also examines the effect that state audit and immunity laws have on the incentives for improving compliance. Using data for a sample of S&P 500 firms, we estimate a bivariate probit model with compliance status and decision to self-audit as two discrete choice variables and a duration model with the length of compliance month as the dependent variable. The empirical analysis controls for the incentives created for compliance and for self-auditing by regulatory and community-based pressures and by pressures created through toxic release information disclosure. We find that facilities belonging to firms subject to inspections in the past, that face a stronger threat of liabilities for Superfund sites, that are more visible due to size and that have a larger ratio of toxic releases relative to the industry are more likely to undertake an environmental audit. Facilities that self-audit are more likely to be and stay longer in compliance with Clean Air Act regulations. Audit privilege and immunity policies have significant and opposite effects on facilities. While audit privilege policies reduce incentives for compliance, audit immunity policies significantly increase them, particularly for firms that have high costs of abatement and would otherwise have a higher likelihood of being in violation. Additionally, we find that facilities that achieve larger reductions in their toxic releases compared to their industry/region are more likely to be and stay longer in compliance with air regulations.
Issue Date:2007
Description:113 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2007.
Other Identifier(s):(MiAaPQ)AAI3270049
Date Available in IDEALS:2015-09-25
Date Deposited:2007

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