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The effects of third party certification on voluntary self-regulation of accidents in the U.S. chemical industry

Huan Li, Neha Khanna () and Martina Vidovic
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Huan Li: Purdue University
Neha Khanna: Binghamton University
Martina Vidovic: Rollins College

Journal of Regulatory Economics, 2018, vol. 53, issue 3, 327-356

Abstract: Abstract We explore whether the introduction of mandatory third party certification in 2005 under the Responsible Care program has reduced the probability and severity of accidents in participating facilities in the U.S. chemical industry. Using a sample of 10,315 observations from 1136 facilities owned by 566 RC and non-RC firms between 1996 and 2010, we estimate the average treatment effect of third party certification. We find that the difference-in-difference estimate of the average treatment effect is statistically insignificant. This result is robust to various model specifications including the potential endogeniety of third party certification due to a firm’s self-selection into RC.

Keywords: Self-regulation; Third party certification; Accidents; Responsible Care; Chemical industry; Difference-in-difference; Endogenous treatment effect; JEL Classification; Q50; Q58; J81 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:kap:regeco:v:53:y:2018:i:3:d:10.1007_s11149-018-9355-0