Publication Type

Journal Article

Version

publishedVersion

Publication Date

3-2025

Abstract

We examine how experiences with disruptive climate events impact the Environmental Protection Agency’s (EPA) monitoring activities and subsequent firm behaviors. Using plausibly exogenous variation in the exposure of EPA regional offices to major hurricanes, we find that exposed EPA regulators increase their monitoring efforts, measured by both inspection frequency and length, at facilities located in their jurisdictions but outside the disaster zone. This effect diminishes over time and is stronger for regulators located closer to the disaster area or experiencing the disaster for the first time. Importantly, the heightened regulatory monitoring following disasters has real effects on regulated facilities–they face more enforcement charges, reduce pollution, and increase voluntary environmental disclosure. Moreover, affected firms shift pollution from facilities overseen by disaster-exposed EPA regional offices to other facilities. Our findings highlight the role of personal experience in shaping regulators’ monitoring activities and their subsequent effects on firms.

Keywords

Regulatory monitoring, Personal experience, Firm pollution, Environmental disclosure, EPA

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Accountability in a Sustainable World Quarterly

First Page

1

Last Page

5

ISSN

2994-4422

Identifier

10.7274/28583258

Additional URL

https://doi.org/10.7274/28583258

Download

Share

COinS