Government-Sponsored Voluntary Environmental Programs and Firm Exits: A Longitudinal and Comparative Study

Project: Research

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In recent decades, many governments around the world have promoted voluntary environmental programs (VEPs) to encourage businesses to go beyond legal compliance and adopt progressive practices to minimize pollution emissions. In theory, VEPs complement the traditional mandatory regulations by reducing the administrative burden for regulators and allowing flexibility for regulatees. In reality, the effectiveness of VEPs can be hindered by inadequate monitoring and corporate opportunism. One central challenge is hence whether and how regulatees are interested in such policy endeavors and able to commit to the program obligations. Firms may be unwilling to enroll due to financial constraints, adopt the programs only symbolically, or exit because of programs’ ineffectiveness in improving environmental performance. Institutional complexities such as policy uncertainty and political turbulence can further undermine firm commitment.In China, where pollution control is now at the top of the government’s agenda, VEPs have a great potential to supplement the existing mandatory and market-based regulations. Nevertheless, we still know little about the determinants of regulatees’ interests and continual efforts in environmental self-regulation. The proposed project will address this gap by conducting a longitudinal and comparative investigation of firm exits from government-sponsored VEPs. It will apply the convergent insights of policy implementation and corporate environmental management to investigate the implementation of the Cleaner Production program—a flagship VEP in China. Specifically, the project will answer three important research questions: (1) How do organizational and industrial forces shape firm exits from government-sponsored VEPs? (2) How does regulatory and political complexity arise and moderate the organizational and industrial explanations of firm exits? (3) Under China’s decentralized policy implementation system, do regional and overtime variations in regulatory and political contexts affect the continuity of government-sponsored VEP?A mixed-method design will be adopted in the project. Archival data on policy implementation and firm participations will be collected in Guangdong province, with assistance from local environmental protection bureaus and the Cleaner Production Association. Semi-structured interviews with involved stakeholders in five major cities of the Pearl River Delta region will be conducted. This project will build on my earlier research on: (1) political commitment and policy uncertainty in China’s environmental governance, and (2) the diffusion of the Cleaner Production (CP) program in Guangzhou. By drawing on new and current data, the proposed research will provide significant insights into the theoretical development and practical implications of voluntary environmental governance. 


Project number9048166
Grant typeECS
Effective start/end date1/01/20 → …