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The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance

Publication ,  Journal Article
Malesky, E; Taussig, M
Published in: Academy of Management Journal
October 1, 2017

Firms in emerging economies exhibit dangerously low rates of compliance with government regulations aimed at protecting society from the negative externalities of their operations. This study builds on individual-level theories from organizational behavior (procedural justice) and political science (deliberative democracy) to develop new firmlevel theory on the mechanism by which a firm is more likely to comply with a regulation after participating in its design by government. We hypothesize and find supporting evidence that such participation increases the likelihood of compliance by positively shaping the firm's view of government legitimacy, but only if the firm views government as responsive to its input. Without this responsiveness, regulatory compliance is even less likely than if the firm did not participate at all. Our empirical work is novel in its focus on the political activities of firms not only within the authoritarian-ruled emerging economy context of Vietnam, but also through study of a highly representative sample dominated by small and medium sized enterprises. We discuss how our work contributes to nonmarket strategy literatures on corporate social responsibility, self-regulation, and corporate political activity, as well as its implications for public policy.

Duke Scholars

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Published In

Academy of Management Journal

DOI

ISSN

0001-4273

Publication Date

October 1, 2017

Volume

60

Issue

5

Start / End Page

1741 / 1770

Related Subject Headings

  • Business & Management
  • 3507 Strategy, management and organisational behaviour
  • 3505 Human resources and industrial relations
  • 1505 Marketing
  • 1503 Business and Management
 

Citation

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Malesky, E., & Taussig, M. (2017). The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance. Academy of Management Journal, 60(5), 1741–1770. https://doi.org/10.5465/amj.2015.0722
Malesky, E., and M. Taussig. “The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance.” Academy of Management Journal 60, no. 5 (October 1, 2017): 1741–70. https://doi.org/10.5465/amj.2015.0722.
Malesky E, Taussig M. The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance. Academy of Management Journal. 2017 Oct 1;60(5):1741–70.
Malesky, E., and M. Taussig. “The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance.” Academy of Management Journal, vol. 60, no. 5, Oct. 2017, pp. 1741–70. Scopus, doi:10.5465/amj.2015.0722.
Malesky E, Taussig M. The danger of not listening to firms: Government responsiveness and the goal of regulatory compliance. Academy of Management Journal. 2017 Oct 1;60(5):1741–1770.

Published In

Academy of Management Journal

DOI

ISSN

0001-4273

Publication Date

October 1, 2017

Volume

60

Issue

5

Start / End Page

1741 / 1770

Related Subject Headings

  • Business & Management
  • 3507 Strategy, management and organisational behaviour
  • 3505 Human resources and industrial relations
  • 1505 Marketing
  • 1503 Business and Management