Local environmental regulation and plant-level productivity

This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb–Douglas production functions that include a measure of the stringency of enviro...

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Veröffentlicht in:Ecological economics 2011-10, Vol.70 (12), p.2516-2522
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description This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb–Douglas production functions that include a measure of the stringency of environmental regulation faced by manufacturing plants. In contrast to previous studies, this paper examines effects on plants in all manufacturing industries, not just those in “dirty” industries. Further, this paper employs spatial–temporal variation in environmental compliance costs to identify effects, using a time-varying county-level index that is based on multiple years of establishment-level data from the Pollution Abatement Costs and Expenditures survey and the Annual Survey of Manufactures. Results suggest that, for the average manufacturing plant, there is no statistically significant effect on productivity of being in a county with higher environmental compliance costs. For the average plant, the main effect of environmental regulation may not be in the spatial and temporal dimensions. ► This paper examines the impact of environmental regulation on manufacturing plants. ► I estimate production functions that include county-level regulatory stringency. ► Time-varying county-level index is based on environmental compliance costs. ► For the average plant, there is no statistically significant effect on productivity. ► For the average plant, regulatory impact may be relatively uniform across space.
doi_str_mv 10.1016/j.ecolecon.2011.08.019
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source PAIS Index; Elsevier ScienceDirect Journals
subjects Abatement
Appropriations and expenditures
Compliance
Cost
Environmental policy
Environmental regulation
Factories
Indexes
Industrial production
Industrial productivity
Industry
Manufacturing
Pollution
Production
Productivity
Regulation
Regulatory policy
Surveys
U.S. manufacturing
U.S.A
United States
title Local environmental regulation and plant-level productivity
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