Unringing the Bell: Can Industries Reverse Unfavorable Institutional Shifts Triggered by their Own Mistakes?

Abstract:     
I present a study of the US chemical industry's unified efforts to reverse an unfavorable institutional shift triggered by the transgressions of one of its members. I measure changes in the industry's institutional environment from 1980 to 2000. I find that the industry's collective efforts did not directly improve institutional conditions confronting individual firms, but did help buffer firms from financial losses that commonly arise when their rivals suffer crises.

Keywords: Institutional change, industry self regulation, collective strategy

Working Paper Series