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Manufacturing Plant Location: Does State Pollution Regulation Matter?

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Author Info
Wayne B Gray

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Abstract

This paper tests whether differences across states in pollution regulation affect the location of manufacturing activity in the U.S. Plant-level data from the Census Bureau's Longitudinal Research Database is used to identify new plant births in each state over the 1963-1987 period. This is combined with several measures of state regulatory intensity, including business pollution abatement spending, regulatory enforcement activity, congressional pro-environment voting, and an index of state environmental laws. A significant connection is found: states with more stringent environmental regulation have fewer new manufacturing plants. These results persist across a variety of econometric specifications, and the strongest regulatory coefficients are similar in magnitude to thos4e on other factors expected to influence location, such as unionization rates. However, a subsample of high-pollution industries, which might have been expected to show much larger impacts, gets similar coefficients. This raises the possibility that differences between states other than environmental regulation might be influencing the results.

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File URL: http://www.ces.census.gov/index.php/ces/cespapers?down_key=100280
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Publisher Info
Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 97-8.

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Date of creation: Jul 1997
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Handle: RePEc:cen:wpaper:97-8

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Related research
Keywords: CES; economic; research; micro; data; microdata; chief; economist;

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References listed on IDEAS
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  1. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, vol. 86(4), pages 789-813, September. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
  3. Barbera, Anthony J & McConnell, Virginia D, 1986. "Effects of Pollution Control on Industry Productivity: A Factor Demand Approach," Journal of Industrial Economics, Blackwell Publishing, vol. 35(2), pages 161-72, December. [Downloadable!] (restricted)
  4. James R. Markusen & Edward R. Morey & Nancy Olewiler, 1992. "Noncooperative Equilibria in Regional Environmental Policies When Plant Locations are Endogenous," NBER Working Papers 4051, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April. [Downloadable!] (restricted)
  6. Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 5-29, October. [Downloadable!] (restricted)
  7. Gray, Wayne B, 1987. "The Cost of Regulation: OSHA, EPA and the Productivity Slowdown," American Economic Review, American Economic Association, vol. 77(5), pages 998-1006, December. [Downloadable!] (restricted)
  8. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law & Economics, University of Chicago Press, vol. 30(2), pages 239-64, October.
  9. Deily, Mary E. & Gray, Wayne B., 1991. "Enforcement of pollution regulations in a declining industry," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 260-274, November. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. repec:bep:eaptop:v:3:y:2003:i:1:p:1144-1144 is not listed on IDEAS
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  2. Eli Berman & Linda T. Bui, 1997. "Environmental Regulation and Labor Demand: Evidence from the South Coast Air Basin," NBER Working Papers 6299, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Stephen P. A. Brown & Kathy J. Hayes & Lori L. Taylor, 2002. "State and local policy, factor markets and regional growth," Working Papers 02 02, Federal Reserve Bank of Dallas. [Downloadable!]
  4. Randy Becker, 2001. "Air Pollution Abatement Costs Under the Clean Air Act: Evidence from the PACE Survey," Working Papers 01-12, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  5. Hadjiyiannis, Costas & Hatzipanayotou, Panos & Michael, Michael S., 2002. "Optimal Tax Policies with Private-Public Clean-Up, Cross-Border Pollution and Capital Mobility," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Park, Dooho & Seidl, Andrew & Davies, Stephen & 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. [Downloadable!]
  7. Wilson, John S. & Tsunehiro Otsuki & Sewadeh, Mirvat, 2002. "Dirty exports and environmental regulation : do standards matter to trade?," Policy Research Working Paper Series 2806, The World Bank. [Downloadable!]
  8. Wolfgang Keller & Arik Levinson, 1999. "Environmental Compliance Costs and Foreign Direct Investment Inflows to U.S. States," NBER Working Papers 7369, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Georges A. Tanguay & Nicolas Marceau, 2000. "Centralized versus Decentralized Taxation of Mobile Polluting Firms," Cahiers de recherche CREFE / CREFE Working Papers 122, CREFE, Université du Québec à Montréal. [Downloadable!]
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  10. Simon Condliffe & O. Ashton Morgan, 2009. "The effects of air quality regulations on the location decisions of pollution-intensive manufacturing plants," Journal of Regulatory Economics, Springer, vol. 36(1), pages 83-93, August. [Downloadable!] (restricted)
  11. Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Working Papers 7297, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Park, Dooho & Davies, Stephen & Seidl, Andrew, 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. [Downloadable!]
  13. M. Kayalica & Sajal Lahiri, 2005. "Strategic Environmental Policies in the Presence of Foreign Direct Investment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(1), pages 1-21, January. [Downloadable!] (restricted)
  14. Christopher S. Decker, 2006. "Implementing Environmental Regulation: An Inter-industry Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 47-66, Winter. [Downloadable!]
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