IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v29y2004i1p97-122.html
   My bibliography  Save this article

Liability for Past Environmental Contamination and Privatization

Author

Listed:
  • Dietrich Earnhart

    ()

Abstract

This paper examines the role ofliability for past environmental contaminationin the privatization processes of Central andEastern Europe. In particular, it establishes alink between a risk-averse investor's amount ofinformation regarding the extent of pastenvironmental contamination (and its cleanupcosts) and the investor's willingness to payfor a particular enterprise, i.e., bid. As theinvestor obtains a more precise estimate of theuncertain cleanup costs, the investor facesless risk; therefore, the investor's riskpremium falls and the investor's bid rises.This link generates four hypotheses regarding aprivatization agency's responses to theinvestor's knowledge of clean-up costs. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Dietrich Earnhart, 2004. "Liability for Past Environmental Contamination and Privatization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(1), pages 97-122, September.
  • Handle: RePEc:kap:enreec:v:29:y:2004:i:1:p:97-122
    DOI: 10.1023/B:EARE.0000035452.76736.51
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/B:EARE.0000035452.76736.51
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Segerson Kathleen, 1993. "Liability Transfers: An Economic Assessment of Buyer and Lender Liability," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 46-63, July.
    2. Farber, Stephen, 1991. "Regulatory schemes and self-protective environmental risk control: a comparison of insurance, liability, and deposit/refund systems," Ecological Economics, Elsevier, vol. 3(3), pages 231-245, September.
    3. Randall Bluffstone & Theodore Panayotou, 2000. "Environmental Liability and Privatization in Central and Eastern Europe: Toward an Optimal Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(4), pages 335-352, December.
    4. Sigman, Hilary, 1998. "Liability Funding and Superfund Clean-Up Remedies," Journal of Environmental Economics and Management, Elsevier, vol. 35(3), pages 205-224, May.
    5. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    6. Segerson, Kathleen, 1989. "Risk and incentives in the financing of hazardous waste cleanup," Journal of Environmental Economics and Management, Elsevier, vol. 16(1), pages 1-8, January.
    7. Rothschild, Michael & Stiglitz, Joseph E., 1971. "Increasing risk II: Its economic consequences," Journal of Economic Theory, Elsevier, vol. 3(1), pages 66-84, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Satoru Komatsu & Andrey Kalugin & Shinji Kaneko, 2012. "Allocating Costs of Environmental Management among Generations: A Case of Environmental Liabilities in Transition Economies," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(2), pages 225-243, November.
    2. repec:ebl:ecbull:v:17:y:2006:i:5:p:1-9 is not listed on IDEAS
    3. Earnhart, Dietrich & Lizal, Lubomir, 2006. "Effects of ownership and financial performance on corporate environmental performance," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 111-129, March.
    4. Shuichi Ohori, 2006. "Trade liberalization, consumption externalities and the environment: a mixed duopoly approach," Economics Bulletin, AccessEcon, vol. 17(5), pages 1-9.
    5. Bluffstone, Randall, 2007. "Privatization and contaminated site remediation in Central and Eastern Europe: Do environmental liability policies matter?," Ecological Economics, Elsevier, vol. 63(1), pages 31-41, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:29:y:2004:i:1:p:97-122. 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.