Come Together? Cooperativeness, Heterogeneity, and the Structure of Collective Action

Abstract : In this study, we examine the antecedents of successful collective action. Using a simulation-based approach, we examine contributions to a public-goods game while varying three parameters among actors: extent of cooperativeness (or the strength of social norms), heterogeneity of claims, and heterogeneity of capabilities. Our results show that cooperativeness is neither necessary nor sufficient for collective action; where actors are heterogenous, collective action may fail despite strong norms of cooperativeness. Moreover, in a context with high actor heterogeneity, a meritocratic system that links claims to capabilities and encourages everyone to act in their own self-interest may outperform a more cooperative system. Our study thus offers a rigorous theoretical analysis of the structural conditions that enable collective action by stakeholders and produce successful social movements.

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Are Native Plants Green? Assessing Environmental Performances of Locally-owned Facilities

Abstract : We study the impact of corporate ownership and community conditions on firm environmental pollution. While the existing literature often thinks of environmental pollution as a unitary construct, we emphasize the distinction between toxic emissions, which have immediate but locally bounded impact, and greenhouse gas (GHG) emissions which have gradual but global impact, producing climate change. Using a facility-level panel of all manufacturing facilities in the US from 2010-2018, and leveraging within-facility changes in ownership status, we show that locally owned firms have lower levels of toxic emissions, but they are also less likely to report GHG emissions, and have higher levels of such emissions when they do report them, with these effects being stronger where the owner is not only headquartered locally, but has operations limited to that state. Our study suggests that while the pressures of local embeddedness may drive firms to be more environmentally responsible towards their local community, they also make firms more indifferent to their global environmental impact.

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There is No Planet B: Stakeholder Governance That Aligns Incentives to Preserve the Amazon Rainforest

Abstract : How do firms design incentives compatible with environmental protection? The new institutional economics identifies the challenges of governing common-pool resources and the difficulties of internalizing environmental externalities into regular market transactions. New stakeholder management theory suggests that firms may avoid the tragedy of the commons through the formation of a polycentric governance structure among stakeholders. This paper evaluates these theoretical claims by analyzing the activities of Natura, a Brazilian cosmetics company, regarding Amazon rainforest preservation. We argue that Natura internalizes positive externalities arising from environmental protection by sharing value with stakeholders in rural Amazon communities. To test this proposition, the paper presents a differences-in-differences analysis comparing forest preservation in the municipalities that Natura entered versus those in which it did not. The study employs an instrumental variable based on missing satellite images, which Natura relies upon to make decisions about entry into different municipalities. Quantitative results show that Natura’s entry into a municipality helps to preserve forested areas. Analysis of three mechanisms using information on crop yields ties Natura’s involvement with stakeholder decisions to cultivate forest-generated crops rather than to engage in clear-cutting. This study evidences how firms can foster environmental protection through Coasean mechanisms.

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Campaign Contributions and New Technology Investment in the Broadband Industry

Abstract : We study how nonmarket actions taken by firms to shape the regulatory environment may impact their strategic market behavior. Studies have shown that corporate political activities (CPAs) can affect policy outcomes and firm value, but their influence on market actions remains underexplored. We propose that firm donations to politicians are associated with reduced investment in new technology infrastructure resources. We also argue that the size of the local market mitigates this effect while the positive local political environment intensifies the negative relationship. Our findings elucidate how firms implement their integrated strategies with both market and nonmarket actions and the important role that the nested nature of the larger political environment and local-level heterogeneity plays in shaping those strategies.

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