Local regulatory anticipation and GHG emissions
研究发现，当美国县内同行企业受到更严格的监管审查时，附近未受直接监管的企业会预期未来惩罚，从而平均减少7%的温室气体排放，且这种效应随地理距离增加而减弱。
Abstract Research Summary Regulatory anticipation is a nonmarket response whereby firms, foreseeing future penalties, adjust their behavior when peers are targeted by regulators. Prior research defines peers using broad jurisdictional boundaries. Instead, I argue that regulatory anticipation may emerge locally, driven by two channels: proximity to peer scrutiny and firms' perceived sanction risks. Examining U.S. facilities' GHG emissions, I exploit variation in local‐peer scrutiny arising from a change in the EPA's High‐Priority‐Violation policy. Difference‐in‐differences estimates show that heightened scrutiny of county peers is associated with 7% lower emissions among non‐targeted firms, driven by those facing higher sanction risks. Distance‐decay analyses indicate that these anticipation patterns weaken with geographic separation. The findings encourage managerial attention to local regulatory conditions and suggest that avoiding regulatory deserts could improve policy effectiveness. Managerial Summary This paper examines how stricter regulatory scrutiny of one firm can prompt nearby, non‐targeted firms to reduce their emissions. Using U.S. data on facilities' greenhouse gas (GHG) emissions, I find that when a county peer faces heightened oversight, non‐targeted firms are associated with about 7% lower GHG emissions on average. These patterns are stronger for firms already at higher risk of environmental penalties, declining as geographic distance from scrutinized peers increases. For managers, the findings highlight the importance of monitoring local regulatory activity and the behavior of nearby peers, as local comparisons can shape stakeholder expectations. For policymakers, the results suggest that avoiding regulatory ‘deserts’ may enhance the effectiveness of climate‐related and environmental regulation.