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Pollution Abatement as a Barrier to Entry

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  • Helland, Eric
  • Matsuno, Mayumi

Abstract

With the dramatic increase in federal and state environmental regulation in the 1970s, the cost of compliance also rose. While compliance costs have been discussed elsewhere, the implications for the competitiveness of markets have been evaluated using case studies of specific law changes and specific industries. This study examines the role of environmental regulations as barriers to entry using a panel of industries over ten years. The results indicate that environmental costs increase the value of q for the top quartile of firms, which suggests that compliance cost constitutes a barrier to entry and creates rents for larger existing firms. Copyright 2003 by Kluwer Academic Publishers

Suggested Citation

  • Helland, Eric & Matsuno, Mayumi, 2003. "Pollution Abatement as a Barrier to Entry," Journal of Regulatory Economics, Springer, vol. 24(2), pages 243-259, September.
    • Handle: RePEc:kap:regeco:v:24:y:2003:i:2:p:243-59
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    Citations

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    Cited by:

    1. Boying Liu & Ana Espinola-Arredondo, 2013. "The Impact of Environmental Taxes on Firms' Technology and Entry Decisions," Working Papers 2013-2, School of Economic Sciences, Washington State University.
    2. Ana Espinola-Arredondo & Boying Liu, 2014. "The Impact of Environmental Taxes on Firm’s Technology and Entry Decisions," Working Papers 2014-4, School of Economic Sciences, Washington State University.
    3. James B. Bailey & Diana W. Thomas, 2017. "Regulating away competition: the effect of regulation on entrepreneurship and employment," Journal of Regulatory Economics, Springer, vol. 52(3), pages 237-254, December.
    4. J. A. Plaza‐Úbeda & J. Burgos‐Jiménez & D. A. Vazquez & C. Liston‐Heyes, 2009. "The ‘win–win’ paradigm and stakeholder integration," Business Strategy and the Environment, Wiley Blackwell, vol. 18(8), pages 487-499, December.
    5. Ana Espínola-Arredondo & Felix Munoz-Garcia & Boying Liu, 2019. "Strategic Emission Fees: Using Green Technology to Deter Entry," Journal of Industry, Competition and Trade, Springer, vol. 19(2), pages 313-349, June.
    6. Anthony Heyes, 2009. "Is environmental regulation bad for competition? A survey," Journal of Regulatory Economics, Springer, vol. 36(1), pages 1-28, August.
    7. Lambert Schoonbeek & Frans Vries, 2009. "Environmental taxes and industry monopolization," Journal of Regulatory Economics, Springer, vol. 36(1), pages 94-106, August.
    8. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    9. Terence Lam & Charles Bausell, 2007. "Strategic Behaviors Toward Environmental Regulation: A Case Of Trucking Industry," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 3-13, January.

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