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Effects of air quality regulation on the destination choice of relocating plants

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Author Info

  • John A. List
  • W. Warren McHone
  • Daniel L. Millimet

Abstract

Whether lax environmental regulations are an important attraction for mobile capital remains one of the most controversial issues in the area of regulatory federalism. While the extant literature does a nice job of estimating the effects of environmental regulation on the spatial allocation of new plant births, one neglected area of research is the effect that environmental regulation has on plant relocation decisions. This paper uses an annual (1980--90) county level panel data set to examine the relationship between air quality regulatory stringency and the destination choice of relocating plants. We estimate empirical models using both parametric and semi-nonparametric specifications. Empirical results from both models suggest that air quality regulations alter significantly the destination choices of relocating plants. Copyright 2003, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 55 (2003)
Issue (Month): 4 (October)
Pages: 657-678

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Handle: RePEc:oup:oxecpp:v:55:y:2003:i:4:p:657-678

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Cited by:
  1. Oates, Wallace, 2001. "A Reconsideration of Environmental Federalism," Discussion Papers dp-01-54, Resources For the Future.
  2. Edward Manderson & Richard Kneller, 2012. "Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(3), pages 317-352, March.
  3. Bouwe R. Dijkstra & Anuj J. Mathew & Arijit Mukherjeea, 2011. "Strict environmental policy: An incentive for FDI," Faculty Working Papers 08/11, School of Economics and Business Administration, University of Navarra.
  4. Wolfgang Keller & Arik Levinson, 2000. "Environmental Regulations and FDI Inflows to U.S. States," Working Papers gueconwpa~00-00-06, Georgetown University, Department of Economics.
  5. Douglas A. Carr, 2011. "The Intergovernmental Fiscal Effects of the Clean Air Act," Public Finance Review, , vol. 39(6), pages 810-830, November.
  6. T. Verbeke & M. De Clercq, 2003. "Environmental policy uncertainty, policy coordination and relocation decisions," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/208, Ghent University, Faculty of Economics and Business Administration.
  7. List, John A. & McHone, W. Warren & Millimet, Daniel L., 2004. "Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?," Journal of Urban Economics, Elsevier, vol. 56(2), pages 303-326, September.

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