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Third Party Certification and Self-Regulation: Evidence from Responsible Care and Accidents in the US Chemical Industry

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  • Li, Huan
  • Khanna, Neha
  • Vidovic, Martina

Abstract

In 2005, the Responsible Care (RC) program implemented a major structural change that mandated independent third party certification for all participants. The goal of this paper is to explore whether the introduction of mandatory third party certification has reduced accidents in RC facilities compared to non-RC facilities in the U.S. chemical industry. Using a sample of 21,741 observations from 1,460 facilities owned by 956 firms between 1995 and 2010, we estimate the average treatment effect by comparing RC facilities to statistically equivalent non-RC facilities before and after the introduction of third party certification. We find that, on average, the effect of third party certification on reducing the accidents is statistically insignificant. The results do not change when we account for self-selection into RC and endogenous treatment.

Suggested Citation

  • Li, Huan & Khanna, Neha & Vidovic, Martina, 2014. "Third Party Certification and Self-Regulation: Evidence from Responsible Care and Accidents in the US Chemical Industry," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170492, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170492
    DOI: 10.22004/ag.econ.170492
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    References listed on IDEAS

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    Cited by:

    1. Li, Huan & Khanna, Neha, 2016. "Does Voluntary Regulation Provide Regulatory Relief? A Lesson from the Responsible Care Program," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235652, Agricultural and Applied Economics Association.

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    Keywords

    Environmental Economics and Policy; Health Economics and Policy; Industrial Organization; Resource /Energy Economics and Policy;
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