Negative Incentives and Regulatory Capture: Noncompliance with Price Ceilings on Essential Medicines in India
研究了印度2013年对255种基本药物设定价格上限后，其他企业的违规行为如何影响焦点企业的违规决策，发现违规企业越多，焦点企业越可能违规，且焦点企业的规模和销量会强化这一关系。
Abstract Nonmarket scholars have paid limited attention to noncompliance as an alternative strategy to capture regulators; yet noncompliance is particularly consequential given its potentially significant negative externalities. We exploit rich data on price ceilings introduced in India in 2013 on 255 essential medicines to test whether noncompliance by other firms drives the focal firm's noncompliance decision. Our results indicate that noncompliance by other firms, particularly those with larger products in the market, is positively associated with a focal firm's noncompliance. The focal firm's scope and sales positively moderate this relationship. Overall, our study indicates that firms are more likely conclude that the potential benefits of regulatory capture using negative incentives outweigh the potential financial and social costs in the presence of a greater number of firms that are already noncompliant. As such, our study draws attention to negative incentives as an important yet largely overlooked nonmarket strategy.