Regulation, Compliance, and Proximity: Evidence from Nuclear Safety

Mario Daniele Amore (), Chloe Le Coq () and Sebastian Schwenen ()
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Mario Daniele Amore: HEC Paris
Chloe Le Coq: Stockholm School of Economics
Sebastian Schwenen: Technische Universität München

No 1520, HEC Research Papers Series from HEC Paris

Abstract: Effective regulation relies on monitoring the compliance of regulated firms. Using data on regulatory inspections and employees’ emergency training in the universe of US nuclear plants, we investigate how regulatory monitoring drives compliance with nuclear safety procedures. We find that nuclear plants farther from the regulator’s regional office exhibit more safety incidents, and their employees are less trained to deal with emergencies. These spatial differences exist despite regulatory monitoring is conducted daily through resident inspectors (i.e., monitoring is continuous and decentralized). The matching between resident inspectors and nuclear plants helps to explain why differences in safety exist: less experienced inspectors are assigned to more distant nuclear plants, and this assignment leads to a decline in employees’ emergency training. Hence, attaining safety through decentralized monitoring requires assigning experienced inspectors to plants that are insulated from the regulator.

Keywords: Safety; Compliance; Nuclear Plants; Regulation; Geography; Training (search for similar items in EconPapers)
JEL-codes: J24 Q42 Q48 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2024-04-25
New Economics Papers: this item is included in nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1520

DOI: 10.2139/ssrn.4806380

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