Abstract
ObjectiveIndustry actors (organizations, associations) can influence the way in which firms comply with regulations. This study examines how this influence process is affected by government intervention.MethodsUsing official, anonymized data from the entire industry of financial intermediation in the Netherlands (N = 8655 firms), we examine how firms’ affiliations with industry actors relate to (1) voluntary actions aligned with improving regulatory compliance (e.g., requesting audits, attending workshops), and (2) law violations. Industry actors are distinguished between trade associations and the industry’s self-regulatory organization (SRO), which is subject to more government intervention. The analysis employs Poisson regressions to explain count variables, and bootstrapping to assess indirect associations. A series of robustness tests focus on relevant sub-samples, employ exact matching to address possible self-selection, and incorporate lagged dependent variables.ResultsThe association between affiliations with industry actors and law violations is negative and significant. This association is more indirect for trade associations than for the SRO (i.e., it is more strongly mediated by the voluntary actions firms take and which help to improve compliance).ConclusionsThese findings go in line with the theory that government intervention makes industry-self regulation more mandated and less voluntary. Under less government intervention, industry actors may promote more voluntary efforts to comply.
Highlights
In a diversity of settings, firms can join industry organizations or associations
The analysis focuses on how being affiliated with each type of industry actor relates to (1) voluntary actions aligned with improving regulatory compliance, and (2) law violations
After integrating the data provided by the Authority for the Financial Markets (AFM) and the self-regulatory organization (SRO), we identify 12 regulations that were subject to assessment in 2010.2 The number of law violations is treated as a count variable, ranging from 0 to 12
Summary
In a diversity of settings, firms can join industry organizations or associations. Industry self-regulation (ISR) broadly refers to the influence that these industry actors exert on firm regulatory compliance. Numerous studies have examined why ISR can be effective or ineffective (e.g., Barnett and King 2008; Lenox 2006; Short and Toffel 2010). This is a critical issue for criminologists and policymakers, as there is great value in identifying why. The economics view indicates that, in order to enforce compliance, industry actors must rely on deterrence and have the power to detect and sanction non-compliant firms (Ashby et al 2004; King and Lenox 2000; Lenox and Nash 2003). The institutional view indicates that industry actors can use other mechanisms, such as active communication and guidance, to enhance normative motivations and support social dynamics that promote voluntary compliance (Gunningham and Rees 1997; Haufler 2013)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
