Validating the effects of the environmental regulation compliance scale: evidence from the Nigerian oil and gas industry

Growing environmental deterioration has caused many countries to tighten their environmental regulations across the globe. Recent studies show that most developed countries enforced stricter environmental regulations creating a pollution haven to developing countries such as Nigeria. Studies show the non-availability of an environmental regulation compliance scale in the energy sectors. The aim of this paper is to validate the effects of environmental regulation compliance scale for oil and gas companies' operations in the Nigerian oil and gas industry. Hence, an adapted questionnaire comprising 11 items was administered to 300 local and multinational oil and gas companies in Nigeria. All the items were subjected to evaluations and validations by eight expert reviewers with cognate experience in oil and gas activities. Evaluation of the reliability and validity of the measures of the environmental regulation scale was performed through confirmatory factor analysis (CFA) using SPSS version 25 and PLS-SEM version 3.8. The results provide evidence that the environmental regulation compliance scale has met the reliability and validity criteria. Consequently, policymakers, practitioners, and researchers can adapt this scale to assess the effects of environmental regulation compliance by companies in different jurisdictions across the globe. This study undoubtedly builds the existing literature and contributes to the subject area; by implication, the validated scale will assist host oil and gas countries with stringent environmental regulations to come up with policies in such a way as to ensure not chasing away the current investors or discouraging prospective ones from investing in their countries.