Good Fences Make Good Neighbors: A Longitudinal Analysis of an Industry Self-Regulatory Institution

Academy of Management Journal, Forthcoming

53 Pages Posted: 12 Jan 2008

See all articles by Michael L. Barnett

Michael L. Barnett

Rutgers Business School, Newark & New Brunswick

Andrew A. King

Tuck School of Business at Dartmouth

Abstract

We extend theories of self-regulation of physical commons to analyze self-regulation of intangible commons in modern industry. We posit that when the action of one firm can cause spillover harm to others, firms share a type of commons. We theorize that the need to protect this commons can motivate the formation of a self-regulatory institution. Using data from the US chemical industry, we find that spillover harm from industrial accidents increased after a major industry crisis and decreased following the formation of a new institution. Additionally, our findings suggest that the institution lessened spillovers from participants to the broader industry.

Keywords: institutions, industry self-regulation, commons problems, cooperative strategy

JEL Classification: L14, L15, L65

Suggested Citation

Barnett, Michael L. and King, Andrew A., Good Fences Make Good Neighbors: A Longitudinal Analysis of an Industry Self-Regulatory Institution. Available at SSRN: https://ssrn.com/abstract=1082938

Michael L. Barnett (Contact Author)

Rutgers Business School, Newark & New Brunswick ( email )

NJ
United States

HOME PAGE: http://www.business.rutgers.edu

Andrew A. King

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States

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