Examining how regulation enforcement impacts firm self-regulation activities

The current research explores how surveillance-based regulatory programs contribute to firm self-regulation activities. Examining product recalls in the U.S automobile industry from 1966-2010 reveals several important findings regarding the conditions in which the threat of regulatory surveillance will be associated with firm self-regulation. First, under conditions of government surveillance and when government punitive actions are consistent across regulatory forms, regulatory standard setting is not associated with self-regulation. The absence of regulatory standards, however, is associated with firm self-regulation. Furthermore, the addition of disclosure requirements that include the transmittal of firm performance information to the public will be conducive to firm self-regulation.