This study conducts an empirical investigation of the various factors driving business compliance with environmental regulations in Vietnam using data from three rounds of the Small and Medium Enterprises Survey. Results show that knowledge about environmental law has a robust and substantial association with business compliance behaviors. In contrast, the number of inspections is not a significant predictor of compliance. There is evidence that paying bribes has a robust significant association with the probability of getting environmental certificates. Factors related to regulatory responses, public and market pressures, and capacities to comply do not have robust associations with compliance behaviors, especially when unobserved time-invariant characteristics of firms are controlled for.

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Business Compliance with Environmental Regulation: Evidence from Vietnam