Big field,small potatoes: An empirical assessment of EPA's self‐audit policy

Environmental self‐auditing is said to deserve and require encouragement. Although firms can audit themselves more cheaply and effectively than regulators, they are deterred for fear that information they uncover will be used against them. To reduce this disincentive, the Environmental Protection Agency's (EPA's) Audit Policy lowers punitive fines when firms promptly disclose and correct self‐discovered violations. While some contend that the Audit Policy is inadequate, EPA touts its success based on the policy's track record. Our examination of that track record leads us to question EPA's claim. Comparing the violations in these cases with those detected by standard EPA enforcement suggests that the typical self‐audited violation is relatively minor. Cases arising under the Policy are more likely to concern reporting violations and less likely to concern emissions. The relative insignificance of self‐audited violations raises a number of policy questions, including whether the Audit Policy should be revised to play a larger role in enforcement. © 2004 by the Association for Public Policy Analysis and Management.     

China's corporate credit reporting system: A comparison with the United States and Germany

Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community.     

International financial reporting standards convergence in the Indian context: Insights from practitioners

The purpose of this paper is to first, understand the existing status of Indian Accounting Standards (Ind-AS) and its convergence from the perspective of accounting practitioners in India; and second, to elucidate the benefits and challenges while implementing Ind-AS. The paper exemplifies the Ind-AS convergence to International Financial Reporting Standards (IFRS) thereon cited as Ind-AS. The study considers exploratory research design and uses an in-depth interview approach, a qualitative research method of 32 practitioners in India from a heterogeneous group of 6 regulating institutions, 8 conglomerate companies and 18 audit firms including the Big four. The preparedness of the Ind-AS transition was studied from the perspective of accounting practitioners interviewed revealing three critical perspectives. First, the respondents believed that a greater understanding of the benefits of IFRS convergence can be built by professional education and proper training. Second, the main challenges reflected by the respondents on the implementation of Ind-AS can be summarised in two key areas: the complexity and interpretation of the accounting standards, since there are fundamental differences between IFRS and the converged Ind-AS. Third, by strengthening the regulatory framework for monitoring, enforcing accounting and auditing requirements concerning listed companies.     

Do markets enhance convergence on international standards? The case of financial regulation

Why do countries that did not participate in the establishment of international standards converge on them in the absence of external coercion? The market‐based perspective asserts that market forces enhance cross‐national convergence on international standards. This paper challenges the market‐based perspective, focusing on compliance with the 1988 Basel Capital Accord in South Korea and Taiwan. First, it argues that adoption of the Basel Capital Accord by these countries was mainly driven by their regulatory authorities’ concern about the potential risk of foreign market closure to noncompliant banks. Second, it demonstrates that enforcement by the two countries’ regulatory authorities was crucial in ensuring compliance. These findings suggest that national regulatory authorities are still key actors in voluntary convergence on international standards.     

Corporate social responsibility in the European Union: a new trade barrier?

• This paper contributes to the discussion about Corporate social responsibility (CSR), competitiveness and trade policies, and how trade barriers emerge between countries already committed to CSR and those for whom CSR is still gaining ground. The authors describe the development of CSR within Europe and explain its role in shaping trade relationships. Gaining access to the European market, and obtaining the ‘licence to operate’ in light of strengthening commitment to CSR, is an issue for many companies. For countries outside the EU it is important to understand what CSR means in the European context and to recognize its implications for conducting business in the region. Further, through its economic power and resources, the EU sets standards and influences international trade norms. The authors conclude that the EU establishes CSR as a trade barrier for non‐complying companies in the terms of organizational culture, communication, capabilities and compliance.

Copyright © 2009 John Wiley & Sons, Ltd.     

The politics of state compliance with international “soft law” in finance

Why do jurisdictions comply (or not) with international soft law in finance? This research systematically links international and domestic explanations of compliance by highlighting the “disjuncture” between the international standard‐setting process and the process of domestic compliance. Two causal mechanisms that affect compliance are identified. In the uploading stage, elected officials delegate the making of international soft law to domestic regulators; large, internationally active financial institutions mobilize extensively and, to a large extent, successfully. In the downloading stage, domestic interest groups team up with elected officials in order to resist compliance with international soft law that has negative distributional implications for domestic constituencies. These arguments are illustrated through a structured, focused comparison, and process tracing of the mixed record of compliance of the two main jurisdictions worldwide—the United States and the European Union—with the main international banking standards, the Basel Accords.     

Assessing the impact of stricter alcohol advertising standards: the case of Beam Global Spirits

Reducing youth exposure to alcohol advertising is a global health priority. In most countries around the world, the alcohol industry is given the opportunity to regulate itself with respect to advertising practices. Generally, the alcohol industry self‐regulations are lax, allowing youth to be disproportionately exposed to alcohol advertising. However, Beam Global Spirits and Wine (Beam) voluntarily adopted more restrictive advertising standards in the United States in 2007. This study assessed Beam's compliance with their new standard and estimates its effect on youth exposure and advertising costs. We found that Beam's compliance with its more restrictive standards was imperfect, but never‐the‐less, we estimated that youth exposure to alcohol advertising was reduced compared to other spirits brands. Beam's more restrictive standards did not increase their advertising costs, and therefore other alcohol companies should consider adopting similar standards around the world. Copyright © 2015 John Wiley & Sons, Ltd.     

Codes in context: How states,markets, and civil society shape adherence to global labor standards

Transnational business regulation is increasingly implemented through private voluntary programs – such as certification regimes and codes of conduct – that diffuse global standards. However, little is known about the conditions under which companies adhere to these standards. We conduct one of the first large‐scale comparative studies to determine which international, domestic, civil society, and market institutions promote supply chain factories' adherence to the global labor standards embodied in codes of conduct imposed by multinational buyers. We find that suppliers are more likely to adhere when they are embedded in states that participate actively in the International Labour Organization treaty regime and that have stringent domestic labor law and high levels of press freedom. We further demonstrate that suppliers perform better when they serve buyers located in countries where consumers are wealthy and socially conscious. These findings suggest the importance of overlapping state, civil society, and market governance regimes to meaningful transnational regulation.     

Intersectoral differences in public affairs: the duty of public reporting in public administration

Public reporting is a requirement for public affairs practitioners in public administration because of the democratic context in which government operates. By reporting to the public‐at‐large on agency activities, government agencies contributed to an informed citizenry, the essential foundation of a democracy. For public affairs in business administration and non‐profit administration, public reporting is desirable rather than mandatory. Public reporting was traditionally accomplished indirectly, through news media coverage of government. However, recent research suggests a diminution of interest by the media in fulfilling its role as an instrument of democracy. This means that the public reporting obligation of public affairs professionals in public administration needs to shift to direct reporting, through such products as annual reports, newsletters, TV programmes, Internet websites etc. Copyright © 2002 Henry Stewart Publications.     

The diffusion of environmental management standards in Europe and in the United States: An institutional perspective

ISO 14001, released in 1996, provides the basic framework for the establishment of an Environmental Management System (EMS) that can be audited and certified. ISO is not only an acronym for the International Organization for Standardization, but is also a term that refers to its Greek meaning: equal. The main rationale for the creation of ISO 14001 was that its worldwide acceptance should facilitate international trade by harmonizing otherwise diffuse environmental management standards and by providing an internationally accepted blueprint for sustainable development, pollution prevention, and compliance assurance.However, the implementation of ISO 14001 varies significantly across the globe. A significant number of firms have adopted ISO 14001 in Western Europe and Asia. In December 1999, 52% of the 14,106 ISO 14001 certified facilities were located in Western Europe and 36% in Asia. On the contrary, very few American companies have adopted this voluntary standard. U.S. certified facilities accounted for only 4.5% of the total of ISO 14001 certified facilities in the world in December 1999.The U.S. institutional environment seems acting as a deterrent to ISO 14000 adoption as U.S. companies are fearful of the certification process which lays their performance open to public scrutiny. The opposite is true in Europe, where governments have encouraged the adoption of environmental management standards by setting up a trusted certification system and providing technical assistance to potential adopters.This paper offers a conceptual framework to analyze this variation in adoption rates. It is proposed that the regulatory, normative and cognitive aspects of a country's institutional environment greatly impact the costs and potential benefits of ISO 14001 adoption and therefore explain the differences in adoption across countries. The analysis is supported by data collected from a phone questionnaire to 140 firms in Europe and a questionnaire mailed to 152 firms in the U.S.     

Patterns of internationalization of Chinese firms—empirical study based on strategic approach

• In this study, firstly we provide an analytical framework for international activities, which are of theoretically significant importance to research and understand the patterns of internationalization. Then, we take 500 top Chinese enterprises as study objects and analyse deeply the behaviour of their FDI (foreign direct investment) scenario from three aspects, namely motivations, entry modes and location choices. The results reveal that: (1) Chinese companies' internationalization is still at the early stage and has not reached the upstream value chain of internationalization; (2) the internationalization business of Chinese companies is diversified in destinations; (3). Chinese companies' modes of entering overseas markets are flexible and most companies have actively tried diverse entry modes with more adaptability; (4) the rapid increase of the FDI by the transnational strategic assets‐seeking companies shows that Chinese companies are inclined to protect and improve competitive advantages through obtaining new assets rather than making use of existing competitive advantages as before. Some implications of findings are also discussed finally.

Copyright © 2009 John Wiley & Sons, Ltd.     

Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance

Post‐crisis international standards have been agreed on in certain areas of banking regulation, namely capital, liquidity, and resolution, but not others, namely bank structure – why? We articulate a two‐step analytical framework that links the domestic and international levels of governance. In particular, we focus on the role of domestic regulators at the interface between the two levels. At the domestic level, regulators evaluate externalities and adjustment costs before engaging in cooperation at the international level. This analysis explains why regulators in the United States and the European Union act as pacesetters, foot‐draggers, or fence‐sitters in international standard setting; that is to say, why they promote, resist, or are neutral toward international financial standards. At the international level, we explain the outcome of international standard setting by considering the interaction of pacesetters and foot‐draggers.     

Promoting Data Protection Standards through Contracts: The Case of the Data Security Council of India

Data protection has emerged as a major corporate and government concern worldwide. The focus is on secure handling of data so as to ensure privacy of customer data and security of corporate data. Privacy and security laws in countries are not harmonized; compliance regulations are different too. As the global hub of outsourcing, India is faced with a challenge of demonstrating compliance with varying compliance regulations in countries. The Data Security Council of India (DSCI) considers the Best Practices Approach as a practical and realistic way to enhance adherence to data security and privacy standards, and to enable a service provider to demonstrate compliance. Getting these standards recognized through contracts can promote data protection. An industry association can act as a third party self‐regulatory organization to promote these standards and enforce them among its members through certification or privacy seals, thereby helping implement data protection in international data flows.     

Managing materiality: a preliminary examination of the adoption of the new GRI G4 guidelines on materiality within the business community

The concept of materiality emerged as the most important element in the new G4 guideline on corporate sustainability reporting launched by the Global Reporting Initiative (GRI) in 2013. This commentary paper offers a preliminary examination of the way in which these new guidelines are being adopted within the business community. The paper begins with a short discussion of the GRI guidelines and the enhanced emphasis on materiality, and the paper draws its empirical material from the first 10 companies listed on Google as having published their sustainability reports in accordance with the G4 guidelines. The findings reveal marked variations in the ways, and the extent to which, the selected companies have initially adopted the GR4 guidelines on materiality and that many of the high‐priority material issues identified by these companies are centred on business continuity rather than environmental sustainability issues. Copyright © 2015 John Wiley & Sons, Ltd.     

Horses for courses: China's accommodative approach to food standard‐setting in response to the internationalization of regulation

This paper examines the evolution of China's food standard‐setting procedures from both domestic and international perspectives, particularly in the context of the internationalization of regulation. After the reform and opening‐up in 1978, state actors and leading enterprises monopolized the process of national food standard setting. With further participation in the global economy in the 21st century, China has become familiar with the international standard‐setting procedures and has modeled its domestic policymaking on these practices. This has resulted in a more transparent, inclusive, scientific, pluralized, and consensus‐based form of decisionmaking. By contrast, the standards of the strategic industries have been harmonized to the standards of international counterparts through a top‐down and authoritarian approach. This paper argues that China uses an accommodative approach, trichotomizing suitable standards and decisionmaking procedures in terms of inclusiveness and transparency, which suits the developmental needs of the domestic market, food export markets, and strategic industries.     

An Exploratory Study on International R&D Strategies of Chinese Companies in Europe

We here present a study that arms the reader with various discussion points on the research and development (R&D) foreign direct investment (FDI) strategies of Chinese multinational corporations (MNCs) in Europe. Through archival research and interviews, we adopted a multi‐case study approach to investigate how significant are these investments and how relevant do they become for the local innovation systems. Our analysis shows that the establishment of R&D centers, and more importantly the evolution of these centers, does not coincide with what international business theories would have predicted. The Chinese MNCs considered entered Europe in a variety of forms, guided by various learning goals. However, we found evidence of the growing tendency of these companies to insulate themselves from local partners and to engage in less explorative and more exploitative R&D activity, adapting technologies developed elsewhere for the European market, gaining access to good indigenous labor and technologies rather than to local partnerships.     

Service Efforts and Accomplishments Standards: Fundamental Questions of an Emerging Concept

In 1994, the Governmental Accounting Standards Board (GASB) adopted and published Concepts Statement No. 2, Service Efforts and Accomplishments Reporting} Although service efforts and accomplishments (SEA) is not a common term, this statement establishes the foundation for the subsequent adoption of reporting requirements that may expand the boundaries of reporting to significantly increase the amount of non-financial information that states and municipalities will report, as well as the cost of external reporting Budget analysts are among prospective users of SEA information. A study of comment letters filed in response to the exposure draft, which preceded Concepts Statement No. 2, shows two divergent views of SEA reporting requirements.2 Support for SEA reporting requirements is grounded in a vision of the potential benefits of SEA reporting;3 opposition to SEA standards is grounded in concerns about potential consequences of instituting reporting requirements.4 The strength of opposition to SEA reporting requirements suggests that consideration of the rationale for standards setting is appropriate. In this article, commonly expressed concerns about reporting requirements are incorporated into five questions. Analysis of these questions evidences the weakness of the rationale for SEA standards as distinguished from the rationale for voluntary SEA reporting. Two proposals are advanced to address concerns about SEA reporting requirements. First, adoption of models of information use from the disciplines of public administration and political science is encouraged. Second, modification of the standard setting process to reflect the non-financial domain of SEA is advocated. Thus, it is proposed that standard setters adopt approaches that emphasize cross-disciplinary research, cooperation with other organizations, and active extension of due process to new stakeholders.     

What can Post‐Democracy tell us about TNCs and Extraterritorial Violations of Human Rights?

This article considers the problem of extraterritorial human rights violations committed by transnational corporations (TNCs), and draws on Crouch's framework in Post‐democracy to illustrate why the issue has proved so difficult for states to regulate. I begin by examining the problem of corporate regulation more generally, and set out Crouch's analysis to show why and how corporations have become so influential. The second section considers the area of business and human rights, and explains why there is ‘a governance gap’ in relation to extraterritorial human rights violations committed by corporations. The third section describes efforts at the international and domestic levels to regulate corporations in relation to this issue. It concludes that while new international principles and innovative hybrid schemes are playing a valuable role in norm creation and standard‐setting, the enforcement of these principles remains limited. Corporations have largely succeeded to date in their lobbying efforts to remain free of any direct obligations under international law.     

Even clubs can’t do without legitimacy: Why the anti‐money laundering blacklist was suspended

This article uses the case of anti‐money laundering regulation to investigate international club organisations’ efforts to secure compliance with their rules. As these rules can hardly claim much legitimacy, one would expect that they are complied with only if the club organisation uses side‐payments or coercion. Indeed, the Financial Action Task Force against Money‐Laundering (FATF), the international standard setter in that field, has used blacklisting to force non‐members into compliance. But although it had greatly improved compliance, the blacklist was suspended again after a short period of time. Why? This article argues that this was due to allegations of the blacklist being illegitimate. The FATF reacted by withdrawing the blacklist and also by engaging in various legitimatory practices, because even club organisations need legitimacy if they want to achieve results. Only if the rules are considered legitimate, will there be actual, and not just formal compliance. Hence this article denies the existence of a dilemma between legitimacy and effectiveness (the conventional view), suggesting that only legitimate rules can be effective.