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Journal of Law, Economics, and Organization Advance Access originally published online on September 12, 2006
Journal of Law, Economics, and Organization 2007 23(3):685-709; doi:10.1093/jleo/ewm018
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© The Author 2006. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Agency Structure and Firm Culture: OSHA, EPA, and the Steel Industry

Mary E. Deily*

Lehigh University

Wayne B. Gray

Clark University

* Department of Economics, Lehigh University, 621 Taylor Street, Bethlehem, PA 18015. Email: med4{at}lehigh.edu.

We compare models of Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA) enforcement and compliance for steel plants during the 1980s. We find that OSHA and EPA respond similarly to plant-level compliance and measures of hazardousness, but differently to firm-level compliance and risks of plant closing, and we relate the differences to the agencies' differing organizational structures. Plant-level compliance is affected by enforcement pressure, compliance costs, and the firm's overall compliance behavior in similar ways for the two regulatory areas, but environmental compliance was also sensitive to plant size and risk of closing. Finally, we find that the likelihood that a plant was in compliance with one agency seemed at most weakly related to whether it was in compliance with the other, but that plants likely to receive enforcement attention from one agency were also more likely to receive enforcement attention from the other agency.


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