Institutions and the Regulation of Business—An International Firm-Level Study of Regulatory Compliance Costs

Gjalt de Jong, Roderick Kloeze

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University of Groningen, Groningen, The Netherlands..

DOI: 10.4236/ajibm.2013.36A001                

Abstract

Prior work has established the negative effects of many regulations on business and policy.These negative effects have been a key driver for many of the so-called better regulation programmes. Despite all efforts, however, deregulation programmes have had inconclusive results and their success remains the subject of ongoing debate. We suggest that the public policy efforts have largely overlooked a business perspective of regulation and its institutional determinants. We argue that the institutional determinants of regulation include the regulation stock, the quality of regulation and the predictability of regulation application. This study is among the first to examine the impact of these institutional determinants on regulatory compliance costs for firms using a unique dataset from companies in OECD countries. Our results convincingly support our approach to the study of regulation.

Keywords

Better Regulation; Compliance Costs; Regulation Stock; Regulation Quality; Regulation Predictability; OECD Countries

Conflicts of Interest

The authors declare no conflicts of interest.

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