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Environmental Regulations and Plant Exit

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Author Info

  • Erik Biørn
  • Rolf Golombek*

    ()

  • Arvid Raknerud

Abstract

A qualitative response model is applied to study the relationship between environmental regulations and plant exit. The data set is Norwegian panel data for establishments in three manufacturing sectors that have high shares of units which have been under strict environmental regulations. In two of the sectors, the estimated exit probability of regulated establishments is, ceteris paribus, only one third of the exit probability of non-regulated establishments. We also find that the probability to change regulation status from being non-regulated to become regulated depends significantly on economic factors. In particular, establishments with weak profitability had the highest probability to come under environmental regulation. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1008276509284
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 11 (1998)
Issue (Month): 1 (January)
Pages: 35-59

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Handle: RePEc:kap:enreec:v:11:y:1998:i:1:p:35-59

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: environmental economics; environmental standards; firm exit; logit model; panel data;

References

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  1. Barbera, Anthony J & McConnell, Virginia D, 1986. "Effects of Pollution Control on Industry Productivity: A Factor Demand Approach," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 161-72, December.
  2. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457 Elsevier.
  3. Mary E. Deily & Wayne B. Gray, 1989. "Enforcement of pollution regulations in a declining industry," Working Paper 8912, Federal Reserve Bank of Cleveland.
  4. Golombek, Rolf & Raknerud, Arvid, 1997. " Do Environmental Standards Harm Manufacturing Employment?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 29-44, March.
  5. Gollop, Frank M & Roberts, Mark J, 1983. "Environmental Regulations and Productivity Growth: The Case of Fossil-Fueled Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 654-74, August.
  6. Wayne B Gray & Ronald J Shadbegian, 1993. "Environmental Regulation And Manufacturing Productivity At The Plant Level," Working Papers 93-6, Center for Economic Studies, U.S. Census Bureau.
  7. Audretsch, David B. & Mata, Jose, 1995. "The post-entry performance of firms: Introduction," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 413-419, December.
  8. Klaus Conrad & Catherine J. Morrison, 1985. "The Impact of Pollution Abatement Investment on Productivity Change: AnEmpirical Comparison of the U.S., Germany, and Canada," NBER Working Papers 1763, National Bureau of Economic Research, Inc.
  9. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
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Citations

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Cited by:
  1. Michael Greenstone & John A. List & Chad Syverson, 2011. "The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing," Working Papers 11-03, Center for Economic Studies, U.S. Census Bureau.
  2. Christopher Knittel & Shulamit Kahn, 2002. "The Impact of the Clean Air Act Amendments of 1990 on Electric Utilitiesand Coal Mines: Evidence from the Stock Market," Working Papers 528, University of California, Davis, Department of Economics.
  3. Roberta De Santis, 2012. "Impact of Environmental Regulations on Trade in the Main EU Countries: Conflict or Synergy?," The World Economy, Wiley Blackwell, vol. 35(7), pages 799-815, 07.
  4. Park, Dooho & Davies, Stephen P. & Seidl, Andrew F., 2001. "A Nationwide, State-Level, Analysis Of Animal Confinement Policy By Selected Species," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36160, Western Agricultural Economics Association.
  5. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
  6. Berck, Peter & Hess, Peter, 2000. "Developing a methodology for assessing the economic impacts of large scale environmental regulations," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt51v1b6wm, Department of Agricultural & Resource Economics, UC Berkeley.
  7. Park, Dooho & Seidl, Andrew F. & Davies, Stephen P. & Frasier, W. Marshall, 2000. "Environmental Policy Influences On Livestock Stocking And Location Decisions," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36340, Western Agricultural Economics Association.
  8. Anthony Heyes, 2009. "Is environmental regulation bad for competition? A survey," Journal of Regulatory Economics, Springer, vol. 36(1), pages 1-28, August.
  9. Nyborg, Karine & Telle, Kjetil, 2004. "A dissolving paradox: Firms’ compliance to environmental regulation," Memorandum 02/2004, Oslo University, Department of Economics.
  10. Cees van Beers & Jeroen C.J.M. van den Bergh, 2000. "The Impact of Environmental Policy on Foreign Trade: Tobey revisited with a Bilateral Flow Model," Tinbergen Institute Discussion Papers 00-069/3, Tinbergen Institute.

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