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This study explores the effect of environmental self-audits (�audits�), which represent an important type of environmental management system practice, on the extent of facilities� compliance with wastewater discharge limits. Theoretically, audits may (1) improve compliance by enhancing the effectiveness of treatment technologies and pollution prevention methods, (2) undermine compliance by distracting facilities� personnel with audit-related administrative burdens, or (3) not influence compliance because these effects neutralize each other. By examining the extent of compliance, our study�s results reflect both improvement toward and beyond compliance. By assessing compliance with multiple pollutants separately, our study examines whether audits influence the control of different pollutants uniformly. Lastly, we employ a dynamic panel estimator, which allows us to explore whether facilities adjust their discharges dynamically, while controlling for any inertia in facilities� pollution control systems. Our study empirically examines the U.S. chemical manufacturing sector between 1999 and 2001 using survey and publicly available EPA data.
