Effectiveness of regulatory interventions on firm behavior: a randomized field experiment with e-commerce firms

Effectiveness of regulatory interventions on firm behavior: a randomized field experiment with... Economic regulators use various instruments to stimulate SMEs to change their behavior, but limited evidence exists on the effectiveness of such interventions. We analyze the effectiveness of three ways of providing e-commerce firms guidance about the legal rules on information disclosure. The initial non-compliance is considerable. In two interventions, firm-specific guidance is given by post mail and by e-mail, respectively; in another intervention, guidance on industry level is given by means of dedicated publications and presentations. In all cases, the guidance was given on behalf of the regulatory authority. The effectiveness of the firm-specific guidance is measured through a randomized field experiment, while for the industry guidance a panel analysis is conducted. We find that sending the firms a letter by post mail slightly improved firm compliance, but overall the various forms of guidance appear to be ineffective. Although information-related interventions are commonly used in practice, such regulatory interventions can fail to influence the behavior of SMEs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Effectiveness of regulatory interventions on firm behavior: a randomized field experiment with e-commerce firms

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Publisher
Springer US
Copyright
Copyright © 2015 by The Author(s)
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-015-9666-9
Publisher site
See Article on Publisher Site

Abstract

Economic regulators use various instruments to stimulate SMEs to change their behavior, but limited evidence exists on the effectiveness of such interventions. We analyze the effectiveness of three ways of providing e-commerce firms guidance about the legal rules on information disclosure. The initial non-compliance is considerable. In two interventions, firm-specific guidance is given by post mail and by e-mail, respectively; in another intervention, guidance on industry level is given by means of dedicated publications and presentations. In all cases, the guidance was given on behalf of the regulatory authority. The effectiveness of the firm-specific guidance is measured through a randomized field experiment, while for the industry guidance a panel analysis is conducted. We find that sending the firms a letter by post mail slightly improved firm compliance, but overall the various forms of guidance appear to be ineffective. Although information-related interventions are commonly used in practice, such regulatory interventions can fail to influence the behavior of SMEs.

Journal

Small Business EconomicsSpringer Journals

Published: Jul 2, 2015

References

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