EconPapers    
Economics at your fingertips  
 

Mitigating ingroup bias in regulatory firms: The role of inspector professionalism

Sae‐Seul Park, Sunkee Lee and Oliver Hahl

Strategic Management Journal, 2025, vol. 46, issue 8, 2019-2048

Abstract: This article adopts the lens of ingroup bias to study why regulatory firms tasked with enforcing regulatory compliance may underperform in their duties. We theorize that ingroup bias can lead regulatory agents to grant unwarranted trust to ingroup clients with whom they share salient characteristics, resulting in less stringent inspections for these clients compared to outgroup clients. We further examine how this effect is moderated by inspectors' professionalism, a human capital dimension reflecting an individual's engagement with their profession and internalization of its norms and standards. Using a difference‐in‐differences approach on micro‐data tracking 86 inspectors across 24,650 inspections of 462 vessels at a marine inspection firm, we find compelling evidence of ingroup bias and show that inspectors' professionalism mitigates its impact on regulatory enforcement stringency.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/smj.3717

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:46:y:2025:i:8:p:2019-2048

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-07-04
Handle: RePEc:bla:stratm:v:46:y:2025:i:8:p:2019-2048