The Effect of Tightening Standards on Automakers' Non-compliance

• 成果类型: Article
• 署名作者: Hu, Kejia; Chopra, Sunil; Chen, Yuche
• 署名单位: Vanderbilt University; Northwestern University; University of South Carolina System; University of South Carolina Columbia
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13419
• 发表日期: 2021
• 页码: 3094-3115
• 关键词: regression-discontinuity design; ENVIRONMENTAL PERFORMANCE; nox emissions; ENFORCEMENT; COMPETITION; QUALITY; IMPACT; FIRMS; management; ECONOMICS

摘要

This study investigates how tightening standards can result in greater non-compliance, especially when market and regulatory interests are misaligned. We confirm a causal relationship that explains the highly publicized auto industry non-compliance phenomenon where on-road NOx emissions exceeded standards. Based on a 15-year on-road vehicle emissions dataset covering 148,837 vehicles from 42 automakers in the EU, we use regression discontinuity to identify the causal impact of standards tightening on non-compliance by controlling other confounding factors. Our results suggest that in the absence of effective monitoring, tightening standards directly drives up automakers' non-compliance. Furthermore, we find that automakers facing more intense substitution pressure from competitors or with less advanced emissions control technology have a higher non-compliance rate. Our findings speak to both policymakers as well as managers in the private sector. When setting limit-based performance goals in situations with conflicting interests and imperfect monitoring, they should anticipate non-compliance from the regulated parties. Our results suggest that tightening standards in such situations should be accompanied by stricter monitoring or other actions that discourage non-compliance.