Clearing the Smoke: Regulations, Moral Legitimacy, and Performance in the U.S. Tobacco Industry

Ana Aranda, Tal Simons

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)
15 Downloads (Pure)

Abstract

Considering recent theoretical discussions about the concept of moral legitimacy, this study advances our understanding of its performance consequences. Specifically, it uncovers the mediating role of moral legitimacy in the relationship between regulations and industry performance. Our analysis of the U.S. state-level data on regulations in a controversial industry between 1994 and 2010 yields four significant findings. The results show that regulations not only decrease performance but also negatively impact moral legitimacy. Moreover, this study provides empirical evidence that moral legitimacy is positively related to industry performance, providing much-needed direct support for this premise. Importantly, the results indicate that moral legitimacy mediates the effect of regulations on performance, but only when regulations are aligned with moral values. Overall, this study extends our understanding of how regulations influence moral legitimacy, and in turn impact industry performance.
Original languageEnglish
Pages (from-to)803-819
Number of pages17
JournalJournal of Business Ethics
Volume187
Issue number4
DOIs
Publication statusPublished - Nov 2023

Bibliographical note

Publisher Copyright:
© 2022, The Author(s).

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