Regulation, Compliance, and Proximity: Evidence from Nuclear Safety

Abstract

Safety compliance typically varies across firms, even in high-risk industries under strict regulation. Analyzing U.S. nuclear power plants, we find that plants located farther from the regulator’s regional office have lower levels of emergency training. This disparity arises from the assignment of less experienced inspectors to more distant plants, with the arrival of less experienced inspectors being associated with a reduction in emergency training. Our findings show that inspector assignment practices are crucial in shaping regulatory effectiveness and safety outcomes.

Keywords: Safety, Compliance, Nuclear Plants, Regulation, Geography, Training

JEL Classification: J24, Q42, Q48