Help remembering the specific term for the following would be very much appreciated!

The following: When a government implements a tax/regulation that is too low in stringency, the new policy may not be sufficient for those that deal with the new policy within a firm (i.e. environmental officer/accountant/compliance staff) to elevate the issue to those who decide on firm-level investment and direction issues (i.e. board members/directors etc.).

In my specific context - the implementation of low levels of new environmental regulation may not be sufficient to stimulate increased investment/focus on innovation (via the mechanism proposed in Porter and Linde (1995)) since it is less likely to overcome the organisational communication barriers.

  • $\begingroup$ If a firm violates environmental laws, it will be eventually be dragged into court. Senior officers of the firm will notice this. So I think you need to explain more clearly the reason why these regulations will be ignored by higher-ups. This is not my area of interest, but I still could not follow the question. $\endgroup$ – Brian Romanchuk Sep 22 at 12:00

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