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The Volkswagen emissions scandal: Exploring the role of environmental concern and social norms

Author

Listed:
  • Marino, M.
  • Parrotta, P.
  • Sala, D.
  • Valletta, G.

Abstract

Nearly a decade after the 2015 emissions scandal, Volkswagen has transitioned from marketing deceptive ‘clean engine cars’ to becoming a major player in the electrification of the automotive industry. Yet, the violation of environmental standards during the scandal resulted in excessive pollutant emissions, posing persistent threats to health and the environment. This paper explores how consumers held Volkswagen accountable for these hazards. Our analysis reveals that the decline in Volkswagen’s sales volumes following the scandal was driven by environmentally concerned consumers globally. However, their reaction was short-lived and mainly limited to the models implicated by the U.S. Environmental Protection Agency. Interestingly, we find no evidence of lost sales to competitors. Instead, we document a within-brand or within-group shift in favor of Volkswagen models compliant with environmental regulations. This phenomenon could be one of the contributing factors explaining Volkswagen’s resilience in navigating the fallout from the scandal.

Suggested Citation

  • Marino, M. & Parrotta, P. & Sala, D. & Valletta, G., 2024. "The Volkswagen emissions scandal: Exploring the role of environmental concern and social norms," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
  • Handle: RePEc:eee:jeeman:v:127:y:2024:i:c:s0095069624000937
    DOI: 10.1016/j.jeem.2024.103019
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    References listed on IDEAS

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    More about this item

    Keywords

    Emissions scandal; Automotive industry; Environmental concern; Cultural tightness; Difference-in-difference;
    All these keywords.

    JEL classification:

    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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