 Do financial penalties for environmental violations facilitate improvements in corporate environmental performance? An empirical investigationAnton Shevchenko Business Strategy and the Environment, 2021, vol. 30, issue 4, 1723-1734 Abstract: Environmental regulations play an essential role in managing firm behavior and providing a reference point for the minimum standards of corporate environmental performance, yet certain firms fail to ensure their environmental performance meets these standards. This research focuses on public firms that the US government has penalized for violating environmental regulations and investigates whether these firms subsequently improved their environmental performance. Surprisingly, neither the receipt of a penalty for an environmental violation nor the imposition of a greater penalty was associated with improvements in environmental performance. Instead, a penalty for environmental violation predicted further, albeit mild, deterioration in environmental performance. While the existing literature has established that financial penalties deter most firms from committing environmental violations, this research contributes to this literature by revealing that these penalties fail to motivate firms that have violated environmental regulations to improve their environmental performance. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:30:y:2021:i:4:p:1723-1734 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
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