Hazard Abatement as a Function of Firm Size

The Effects of Internal Firm Characteristics and External Incentives

by Robert H. Sims

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Using survey data collected from 2,000 members of the National Federation of Independent Business, the author examines which factors influence firms to manage hazards in the workplace. The author constructs a simple economic model of the decisionmaking process firms use to manage hazards to structure the survey data collected from firms of various sizes in high- and low-risk industries. The model classifies the factors that affect hazard management decisions into two groups: (1) external incentives for hazard management (e.g., the worker’s compensation program and OSHA) and (2) internal characteristics of the firm (e.g., management attitudes and firm capabilities). Using descriptive and tabular analysis and multiple regression analysis of the determinants of hazard abatement actions, the author finds that the likelihood of hazard abatement actions increases with firm size and industry risk levels. The significance and magnitude of the substantive variables in the regression model support the hypothesis that firm-size variation in abatement actions is due to differences in the internal characteristics of the firm and differences in the external incentives for hazard abatement across the firm-size continuum.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Hazard Management Decisions: A Conceptual Framework and Research Hypothesis

  • Chapter Three

    Internal Structure of the Firm

  • Chapter Four

    External Incentives for Hazard Management Decisions

  • Chapter Five

    Research Results

  • Chapter Six

    A Simple Policy Analysis

  • Appendix One

    The NFIB Survey Instrument

  • Appendix Two

    Tabulations of NFIB Survey Responses Shown in Figures

  • Appendix Three

    Logistic Regressions of Separate Abatement Actions

Research conducted by

This document was submitted as a dissertation in November 1988 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Frank A. Camm (Chair), James N. Dertouzos, and Richard B. Victor.

This report is part of the RAND Corporation Dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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