General Deterrence and Corporate Environmental Behavior, 27 Law & Pol'y 262 (2005)
This research addresses the assumption thatâ€šÃ„Ãºgeneral deterrenceâ€šÃ„Ã¹ is an important key to enhanced compliance with regulatory laws. Through a survey of 233 firms in several industries in the United States, we sought to answer the following questions: (1) When severe legal penalties are imposed against a violator of environmental laws, do other companies in the same industry actually learn about suchâ€šÃ„Ãºsignal casesâ€šÃ„Ã¹? (2) Does knowing aboutâ€šÃ„Ãºsignal casesâ€šÃ„Ã¹ change firmsâ€šÃ„Ã´ compliance-related behavior? It was found that only 42 percent of respondents could identify theâ€šÃ„Ãºsignal case,â€šÃ„Ã¹ but 89 percent could identify some enforcement actions against other firms, and 63 percent of firms reported having taken some compliance-related actions in response to learning about such cases. Overall, it is concluded that because most firms are in compliance already (for a variety of other reasons), this form ofâ€šÃ„Ãºexplicit general deterrenceâ€šÃ„Ã¹ knowledge usually serves not to enhance the perceivedthreatof legal punishment, but asreassurancethat compliance is not foolish and as areminderto check on the reliability of existing compliance routines.