Environmental liability law and R&D subsidies: results on the screening of firms and the use of uniform policy

Abstract

This paper analyzes both R&D in pollution control technology and pollution abatement by firms that are subject to environmental liability law (either strict liability or negligence) and are granted R&D subsidies. Firms differ in their R&D costs (private information) and experience technology spillovers. Policy makers may induce first-best abatement and R&D levels despite asymmetric information by graduating policy instruments to screen firms. The chances of implementing first-best activity levels by such means differ under strict liability and negligence, and examples suggest that negligence performs better. The paper also studies the case in which uniform policy levels are imposed on heterogeneous firms, showing that strict liability tends to outperform negligence from a social welfare perspective in this scenario.

Mandatory Disclosure of Corporate Social Responsibility and the Quality of Earnings Management

“…Therefore, according to stakeholder theory, mandatory CSR reporting will undoubtedly draw the attention of government regulators and other stakeholders to the company [14], which in turn will help to increase the effectiveness of external scrutiny of corporate non-compliance [11]. In addition, according to the theory of organisational legitimacy, the operational development of a company must comply with legitimacy requirements, as failure to do so can lead to regulatory sanctions and public condemnation [19]. Research suggests that the disclosure of CSR information enables stakeholders to more accurately assess the integrity and ethical standards of corporate managers [20].…”

Does Environmental Information Disclosure Affect the Sustainable Development of Enterprises: The Role of Green Innovation

“…With the strengthening of the interdisciplinary and continuous in-depth study of business management theory, this concept is being widely used in business organization research. According to the theory of the organizational legitimacy of enterprises, companies must abide by certain social norms in their business activities and must actively assume social responsibilities; moreover, the act of disclosing environmental information can prove the legitimacy of a company's existence [41,42]. Under the pressure of strict and complete environmental laws and regulations, companies tend to disclose more detailed environmental protection measures and pollution discharge information to obtain government support and to avoid the risk of violations [43,44].…”