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Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis

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  • Tim Jeppesen
  • John A. List
  • Henk Folmer

Abstract

Stricter environmental regulations are often opposed on the grounds that they will alter equilibrium capital flows. Empirical evidence in this area remains largely unresolved, mainly due to the quite disparate results found in the literature. This paper takes a positive look at the relationship between new manufacturing plant location decisions and environmental regulations by examining data from 11 studies that provide more than 365 observations. One major result from our meta-analysis is that methodological considerations play a critical role in shaping the body of received estimates. Our empirical estimates also lend insights into future research that is necessary before any robust conclusions can be made regarding the effects of environmental regulations on capital flows. Copyright 2002 Blackwell Publishers Inc.

Suggested Citation

  • Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49.
  • Handle: RePEc:bla:jregsc:v:42:y:2002:i:1:p:19-49
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    References listed on IDEAS

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    1. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
    2. Virginia D. McConnell & Robert M. Schwab, 1990. "The Impact of Environmental Regulation on Industry Location Decisions: The Motor Vehicle Industry," Land Economics, University of Wisconsin Press, vol. 66(1), pages 67-81.
    3. 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.
    4. Robert Tannenwald, 1997. "State regulatory policy and economic development," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 83-108.
    5. John A. List & Mitch Kunce, 2000. "Environmental Protection and Economic Growth: What Do the Residuals Tell Us?," Land Economics, University of Wisconsin Press, vol. 76(2), pages 267-282.
    6. Henk Folmer & Tim Jeppesen, 2001. "The confusing relationship between environmental policy and location behaviour of firms: A methodological review of selected case studies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(4), pages 523-546.
    7. Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
    8. V. Kerry Smith & Yoshiaki Kaoru, 1990. "Signals or Noise? Explaining the Variation in Recreation Benefit Estimates," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 419-433.
    9. List, John A., 2001. "US county-level determinants of inbound FDI: evidence from a two-step modified count data model," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 953-973, May.
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