Safety regulation enforcement and production safety: The role of penalties and voluntary safety management systems

Di Fan, Andy C.L. Yeung, Daphne W. Yiu, Chris K.Y. Lo (Corresponding Author)

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

Scholars, government, and the public expect that legal enforcement should be an effective means to prevent a firm's future safety violation behavior in daily productions. However, the literature provides limited insights into whether safety regulation enforcement is effective in helping firms reduce future safety violations. Therefore, this study examines the relationship between occupational health and safety enforcement and a firm's future violation behavior. We carried out a regression analysis based on a panel sample of 2965 listed United States manufacturers with 4474 violation records issued by the Occupational Safety and Health Administration. We find limited effectiveness of enforcement. Our results indicate that although past violation experiences are negatively correlated with subsequent repeat violations (violations of the same clause), they are positively correlated with non-repeat violations (violations of a different clause) and the number of overall violations (the sum of both). The factors that can reinforce effectiveness are also explored in this study. Our analyses show that the effectiveness of safety regulation enforcement is significantly enhanced when reinforced by stringent penalties and Occupational Health and Safety Assessment Series 18001 certifications. This study contributes to the literature on the operational safety and policy–operations interaction. We challenge conventional wisdom by proposing that regulatory pressures do not necessarily improve firms' overall social responsibility practices in terms of worker health and safety. We also discuss the implications of this for the occupational health and safety (OHS) management practice.

Original languageEnglish
Article number108481
JournalInternational Journal of Production Economics
Volume248
DOIs
Publication statusPublished - Jun 2022

Keywords

  • Behavioral theory of the firm
  • Institutional theory
  • Management system
  • Organizational learning
  • Safety

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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