Environmental performance and plant closure
This study uses a sample of plant closings as the testing stage to examine the financial consequences of variant environmental performance records and stakeholder pressure levels. It compares 117 manufacturing facilities closing down between 1998 and 2000 to 351 facilities surviving through this period, along four measures of environmental performance. It shows that in the ten years prior to closure, closing facilities reduce their toxics emissions relatively more and incur somewhat stronger community and regulatory pressures than surviving ones. The results persist through alternative versions of the model and suggest that the environmental performance of closing facilities is at least as good as that of surviving ones. The mix of environmental practices of closing facilities differs from that of surviving ones with the former engaging in significantly less recycling of waste than the latter. Closing facilities focus more on end-of-pipe measures while surviving ones engage in more pro-active strategies, consistent with evidence in the literature of a positive relation between pro-active environmental practices and performance. Stakeholder pressures, in some cases (e.g., in pollution intensive industries), may be associated with unrecoverable costs to facilities, including closure, depending on the environmental management choices of the facilities.
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.:
- Vernon Henderson, 1995.
"Effects of Air Quality Regulation,"
NBER Working Papers
5118, National Bureau of Economic Research, Inc.
- Blackwell, David W. & Marr, M. Wayne & Spivey, Michael F., 1990. "Plant-closing decisions and the market value of the firm," Journal of Financial Economics, Elsevier, vol. 26(2), pages 277-288, August.
- Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 379-421, April.
- Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
- Khanna, Madhu & Quimio, Wilma Rose H. & Bojilova, Dora, 1998. "Toxics Release Information: A Policy Tool for Environmental Protection," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 243-266, November.
- 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.
- Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
- Hamilton James T., 1995. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 98-113, January.
- Berman, E. & Bui, L.T., 1997.
"Environmental Regulation and Labor demand: Evidence from the South Coast Air Basin,"
82, Boston University - Industry Studies Programme.
- Berman, Eli & Bui, Linda T. M., 2001. "Environmental regulation and labor demand: evidence from the South Coast Air Basin," Journal of Public Economics, Elsevier, vol. 79(2), pages 265-295, February.
- Eli Berman & Linda T. Bui, 1997. "Environmental Regulation and Labor Demand: Evidence from the South Coast Air Basin," Papers 0082, Boston University - Industry Studies Programme.
- Gene M. Grossman & Alan B. Krueger, 1995.
"Economic Growth and the Environment,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(2), pages 353-377.
- Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
- Arik Levinson, 2001.
"An Industry-Adjusted Index of State Environmental Compliance Costs,"
in: Behavioral and Distributional Effects of Environmental Policy, pages 131-158
National Bureau of Economic Research, Inc.
- Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," Working Papers gueconwpa~00-00-08, Georgetown University, Department of Economics.
- Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Working Papers 7297, National Bureau of Economic Research, Inc.
- 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.
- Robert D. Klassen & Curtis P. McLaughlin, 1996. "The Impact of Environmental Management on Firm Performance," Management Science, INFORMS, vol. 42(8), pages 1199-1214, August.
- Glen Dowell & Stuart Hart & Bernard Yeung, 2000. "Do Corporate Global Environmental Standards Create or Destroy Market Value?," Management Science, INFORMS, vol. 46(8), pages 1059-1074, August.
- Andrew King & Michael Lenox, 2002. "Exploring the Locus of Profitable Pollution Reduction," Management Science, INFORMS, vol. 48(2), pages 289-299, February.
- Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
- Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:62:y:2009:i:4:p:484-494. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.