Beyond Endogeneity

How Firms and Regulators Co‐Construct the Meaning of Regulation

Bibliographic Data

ID6090102
AuthorsSharon Gilad (0000-0001-5350-506X, Hebrew University of Jerusalem, corresponding author)
Year2014
Volume36
Issue2
Pages134-164
Publication date2014-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueLaw & Policy (JOURNAL)
Journal identifiersISSN: 0265-8240 • E-ISSN: 1467-9930
PublisherWiley (PUBLISHER • GB)
DOI10.1111/lapo.12017
OpenAlexW1937070906
LanguageEN
Citations received22
References cited55

What role do regulators and firms play in the construction of open‐ended regulatory terms? The new institutionallegal endogeneitymodel posits that organizations respond to legal uncertainty by adopting formal structures to symbolically signal their compliance. These structures, however, tend to embody businesses' managerial and commercial values, as opposed to regulatory goals. Law becomes endogenous insofar as legal actors then defer to businesses' institutionalized ideas about regulation and compliance. Professionals, such as lawyers and human‐resource managers, and their strategic deployment of framing, are portrayed as the engines of the above process of legal endogeneity. By comparison, administrative agencies' strategies in shaping the meaning that corporations attach to the law are practically ignored. Building on a detailed case study ofBritish financial firms' responses to theFinancialServicesAuthority'sTreatingCustomersFairly initiative, this article problematizes the supposition of regulatory deference to business constructions of law. Instead, it develops a more balanced model that recognizes business professionals'andregulators'co‐constructionof regulation and compliance. The process of regulatory meaning co‐construction, as depicted by this model, involves alignment and disputes between regulators' and professionals' strategic framing of regulatory concerns with tangible consequences for the enactment of regulation

Business · Compliance (psychology · Deference · Economics · Endogeneity · Framing (construction · Law and economics · Meaning (existential · Political science · Public relations · Engineering · Law · Law, Economics, and Judicial Systems · Management and Organizational Studies · Regulation and Compliance Studies

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