Abstract

A number of high-profile mislabeling incidents have led to many studies exploring the decision-making processes that firms make around performing illegal acts. However, it remains unclear why the proportion of firms conducting these acts constantly fluctuates and never disappears. Therefore, this study investigated this by carrying out a longitudinal analysis of food labeling in the Taiwanese rice industry. Drawing on the institutional isomorphism theory, it was found that the degree of mislabeling is negatively correlated with both the level of control of inspection regulations and public attention toward food regulations, and positively correlated with the previous proportion of firms mislabeling their products. Thus, there is a feedback loop between regulatory control, public attention, and the amount of mislabeling, with the amount of mislabeling not only being affected by the former degree of regulatory control, public attention, and mislabeling, but also modifying the future status of each of these. These findings further our understanding of the causal effects of illegal actions in the institutional agricultural environment.