The impact of information frictions within regulators: evidence from workplace safety violations

Aneesh Raghunandan and Thomas Ruchti

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Occupational Safety and Health Administration (OSHA) is decentralized, wherein field offices coordinated at the state level undertake inspections. We study whether this structure can lead to interstate frictions in sharing information and how this impacts firms’ compliance with workplace safety laws. We find that firms caught violating in one state subsequently violate less in that state but violate more in other states. Despite this pattern, and in keeping with information frictions, violations in one state do not trigger proactive OSHA inspections in other states. Moreover, firms face lower monetary penalties when subsequent violations occur across state lines, likely due to the lack of documentation necessary to assess severe penalties. Finally, firms are more likely to shift violating behavior into states with greater information frictions. Our findings suggest that internal information within regulators impacts the likelihood and location of corporate misconduct.

Keywords: internal information; information frictions; OSHA; workplace safety; decentralization (search for similar items in EconPapers)
JEL-codes: D82 D83 J81 J83 M41 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2024-06-01
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Accounting Research, 1, June, 2024, 62(3), pp. 1067-1120. ISSN: 0021-8456

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:122404

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