| Within the discipline of economics, the diverse schools of economic thought have developed numerous theoretical models of technological innovation and diffusion. Unlike any other economics field of study, the technological innovation and diffusion models concur in their analyses of firm behavior in response to regulation, regardless of allegiance to a particular school of economic thought, whether Neoclassical, Evolutionary, or Behavioral. The models set forth two fundamental theories: (1) technological innovation and diffusion are inhibited by regulation; and (2) firms respond defensively to regulation.; This research challenges the validity of these two fundamental theories. Evidence exists within the US copper smelting industry that disputes both theories. According to the theoretical models, under the constraint of clean air regulation, the US copper smelting industry will experience a decrease in smelting technology innovation and diffusion due to the inherent defensive responses from individual copper smelting firms. However, US copper smelting firms have responded to air regulations with varied strategies including offensive, innovative, risk taking behaviors, as well as traditional defensive, noninnovative, risk averse behaviors.; Due to the imposition of stricter US environmental standards in the late 20th century A.D., the US copper smelting industry has broadened its production objectives to include environmental responsibility, as well as efficient copper production. This research hypothesizes that not all US copper smelting firms respond to regulation with traditional defensive, noninnovative risk averse behaviors. Contrarily, this research hypothesizes that a US copper smelting firm's response to regulation is dependent upon two significant variables: the firm's historical approach to risk; and the firm's expectations about future regulations. As firms attempt to comply with increased environmental restrictions and maintain global competitiveness, firms employ a variety of strategies dependent upon acceptable risk level.; To determine the validity of this research hypothesis and to analyze its significance, this research employs a case study approach with respect to the models provided in an interpretive survey format. The case study incorporates primary survey information and market research.; This research will be useful in the further analysis of firm behavior in other industries, markets, and economies. Policymakers imposing increased environmental, social, and production restrictions, should be compelled to account for potential firm behaviors and responses in an effort to maintain economic, social, or environmental stability. |
