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Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity Score Matching Estimator

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Author Info
John A. List (University of Maryland)
Daniel L. Millimet (Southern Methodist University, Southern)
Per G. Fredriksson (Methodist University)
W. Warren McHone (University of Central Florida)

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Abstract

This study examines the effects of air quality regulation on economic activity. Anecdotal evidence and some recent empirical studies suggest that an inverse relationship exists between the stringency of environmental regulations and new plant formations. Using a unique county-level data set for New York State from 1980 to 1990, we revisit this conjecture using a seminonparametric method based on propensity score matching. Our empirical estimates suggest that pollution-intensive plants are responding to environmental regulations; more importantly, we find that traditional parametric methods used in previous studies may dramatically understate the impact of more stringent regulations. Copyright (c) 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/003465303772815844
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Publisher Info
Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 85 (2003)
Issue (Month): 4 (09)
Pages: 944-952
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Handle: RePEc:tpr:restat:v:85:y:2003:i:4:p:944-952

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  2. Pizer, William A. & Morgenstern, Richard & Shih, Jhih-Shyang, 2008. "Evaluating Voluntary Climate Programs in the United States," Discussion Papers dp-08-13, Resources For the Future. [Downloadable!]
  3. Henderson, Daniel & Millimet, Daniel, 2005. "Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States: A Nonparametric Reassessment," Departmental Working Papers 0507, Southern Methodist University, Department of Economics. [Downloadable!]
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  4. Ronald B. Davies & Helen T. Naughton, 2003. "Cooperation in Environmental Policy: A Spatial Approach," University of Oregon Economics Department Working Papers 2006-18, University of Oregon Economics Department, revised 10 Jun 2003. [Downloadable!]
  5. Anthony Heyes, 2009. "Is environmental regulation bad for competition? A survey," Journal of Regulatory Economics, Springer, vol. 36(1), pages 1-28, August. [Downloadable!] (restricted)
  6. Andrea M. Leiter & Arno Parolini & Hannes Winner, 2009. "Environmental Regulation and Investment: Evidence from European Industries," Working Papers 2009-04, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
  7. Wright, Christopher, 2006. "Estimating the Effect of the Chesapeake Bay Program on Application Rates for Enrollment in the Environmental Quality Incentive Program: A Case Study of Pennsylvania," 2006 Annual meeting, July 23-26, Long Beach, CA 21164, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  8. Gary Koop & Lise Tole, 2008. "What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry," Journal of Productivity Analysis, Springer, vol. 30(2), pages 129-143, October. [Downloadable!] (restricted)
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  9. Arik Levinson & M. Scott Taylor, 2004. "Unmasking the Pollution Haven Effect," NBER Working Papers 10629, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Andreas Waldkirch & Munisamy Gopinath, 2004. "Pollution Haven or Hythe? New Evidence from Mexico," International Trade 0412005, EconWPA. [Downloadable!]
  11. O. Ashton Morgan & Simon Condliffe, 2009. "Spatial Heterogeneity in Environmental Regulation Enforcement and the Firm Location Decision among U.S. Counties," Working Papers 09-12, Department of Economics, Appalachian State University. [Downloadable!]
  12. Abay Mulatu & Raymond J.G.M. Florax & Cees A.A.M. Withagen, 2001. "Environmental Regulation and Competitiveness," Tinbergen Institute Discussion Papers 01-039/3, Tinbergen Institute. [Downloadable!]
  13. Maria Garcia-Valiñas, 2007. "What level of decentralization is better in an environmental context? An application to water policies," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(2), pages 213-229, October. [Downloadable!] (restricted)
  14. Sam, Abdoul G. & Innes, Robert & Khanna, Madhu, 2006. "How do Voluntary Pollution Reduction Programs (VPRs) Work? An Empirical Study of Links between VPRs, Environmental Management, and Environmental Performance," 2006 Annual meeting, July 23-26, Long Beach, CA 21192, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  15. Andreas Waldkirch & Munisamy Gopinath, 2008. "Pollution Control and Foreign Direct Investment in Mexico: An Industry-Level Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(3), pages 289-313, November. [Downloadable!] (restricted)
  16. Liu, Xiangping & Lynch, Lori, 2006. "Do Agricultural Preservation Programs Affect Farmland Conversion? Evidence from a Propensity Score Matching Estimator," Working Papers 28569, University of Maryland, Department of Agricultural and Resource Economics. [Downloadable!]
  17. Copeland, Brian R., 2005. "Policy Endogeneity and the Effects of Trade on the Environment," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), April. [Downloadable!]
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