The Effect of Formal and Informal Regulations on Industrial Effluents and Firm Compliance Behavior in Malaysia
Author:
Nawawi Mohd Nasir bin1ORCID, Samsudin Hazman bin1ORCID, Saputra Jumadil1ORCID, Szczepańska-Woszczyna Katarzyna2ORCID, Kot Sebastian3ORCID
Affiliation:
1. Department of Economics, Faculty of Business , Economics and Social Development, Universiti Malaysia Terengganu , 21030 Kuala Nerus, Terengganu , Malaysia 2. Department of Management, Faculty of Applied Sciences , WSB University , Dabrowa Górnicza , Poland 3. The Management Faculty , Czestochowa University of Technology , Częstochowa , Poland and Faculty of Economics and Management Sciences , North-West University , Vaal Triangle Campus, P.O. Box 1174 , Vanderbijlpark , South Africa
Abstract
Abstract
The rapid development of the manufacturing sector has been causing industrial effluents pollution. The practice of environmental regulation in the emerging economy focused on the externalities impact of industrialization. In conjunction with the issue, this study examines the effect of formal and informal regulation on the industrial effluent act and the firm compliance behavior in Malaysia. This quantitative study uses a survey questionnaire (structured) and involved 42 factories of three industries, namely food and beverages, textiles, and paper in Penang, Kedah, and Perlis. The data were analyzed using non-parametric tests: The Chi-Square, Mann-Whitney, and Spearman’s Rho. This study uses the firm behavior theory as the framework, and our non-parametric analyses showed that the traditional enforcement and fined probability could significantly affect compliance levels. We also find the market, consumer, competitor, and investor pressure positively influence firm compliance. The empirical results suggest effective enforcement of environmental regulation and the role of non-regulation must be empowered as a support mechanism for pollution control.
Publisher
Stowarzyszenie Menedzerow Jakosci i Produkcji
Subject
Management of Technology and Innovation,Industrial and Manufacturing Engineering,Safety, Risk, Reliability and Quality,Management Information Systems
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