VOLUNTARY POLLUTION ABATEMENT: TESTING ALTERNATIVE THEORIES

We broaden the existing empirical literature on environmental regulation and voluntary pollution abatement programs by testing the effects of implicit boycott threats and a firm's participation in a partnership program on its subsequent regulatory oversight using EPA's 33/50 program as a research experiment. Our results are consistent with the hypothesis of a preemptive self-selection to deter consumer boycotts. The findings also indicate that (1) predetermined corrective actions constitute a significant determinant of voluntary participation and (2) EPA reciprocated to voluntary participation by easing regulatory oversight on participants.