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Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods

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  • John A. List

    () (Department of Economics, College of Business, University of Central Florida, Orlando, FL 32816-1400, USA)

  • W. Warren McHone

    () (Department of Economics, College of Business, University of Central Florida, Orlando, FL 32816-1400, USA)

Abstract

In this article, we use annual (1980-90) county-level manufacturing plant location data for New York State to examine the effects of the 1977 Clean Air Act Amendments on the location decisions of new pollution-intensive manufacturing plants in the &ldquo:neo-regulatory" (1980-84) and "mature-regulatory" (1985-90) phases of the Act's implementation. Our results suggest that the temporal effects of regulation vary. Whereas the location decisions of pollution intensive manufacturing firms were unaffected by the Act's regulatory restrictions in the "neo-regulatory" period, the restrictions appear to have had a significant negative impact on the location decisions of these types of firms in the Act's "mature-regulatory" phase. The diversion of new pollution intensive plants to counties with less stringent environmental regulations suggests that current US environmental regulations may be leading to a "browning process" whereby counties historically free of pollution become havens for polluters.

Suggested Citation

  • John A. List & W. Warren McHone, 2000. "Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 177-190.
  • Handle: RePEc:spr:presci:v:79:y:2000:i:2:p:177-190
    Note: Received: 2 April 1999
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    1. repec:bla:presci:v:96:y:2017:i:3:p:519-535 is not listed on IDEAS
    2. Becker, Randy A., 2005. "Air pollution abatement costs under the Clean Air Act: evidence from the PACE survey," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 144-169, July.
    3. Josep-Maria Arauzo-Carod & Daniel Liviano-Solis & Miguel Manjón-Antolín, 2010. "Empirical Studies In Industrial Location: An Assessment Of Their Methods And Results," Journal of Regional Science, Wiley Blackwell, vol. 50(3), pages 685-711.
    4. List, John A. & McHone, W. Warren & Millimet, Daniel L., 2004. "Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?," Journal of Urban Economics, Elsevier, vol. 56(2), pages 303-326, September.
    5. Hoffman, Joan, 2008. "Watershed shift: Collaboration and employers in the New York City Catskill/Delaware Watershed from 1990-2003," Ecological Economics, Elsevier, vol. 68(1-2), pages 141-161, December.
    6. 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.
    7. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
    8. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    9. Kim, Kijin, 2013. "The Effects of the Clean Air Act on Local Industrial Wages," 6th Annual CRAE, April 5-6, 2013, Columbus, Ohio 147489, Midwest Graduate Student Conference on Regional and Applied Economics (CRAE), The Ohio State University, Department of Agricultural, Environmental and Development Economics.
    10. Rauscher, Michael, 2001. "International trade, foreign investment, and the environment," Thuenen-Series of Applied Economic Theory 29, University of Rostock, Institute of Economics.
    11. Becker Randy A, 2003. "Pollution Abatement Expenditure by U.S. Manufacturing Plants: Do Community Characteristics Matter?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-23, December.
    12. List John A. & Millimet Daniel L & McHone Warren, 2004. "The Unintended Disincentive in the Clean Air Act," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-28, February.
    13. Miguel C. Manjon-Antolin & Josep Maria Arauzo-Carod, 2006. "Locations and Relocations: Modelling, Determinants, and Interrelations," ERSA conference papers ersa06p33, European Regional Science Association.
    14. Douglas A. Carr, 2011. "The Intergovernmental Fiscal Effects of the Clean Air Act," Public Finance Review, , vol. 39(6), pages 810-830, November.
    15. Morgan, O. Ashton & Condliffe, Simon, 2009. "Spatial Heterogeneity in Environmental Regulation Enforcement and the Firm Location Decision among U.S. Counties," The Review of Regional Studies, Southern Regional Science Association, vol. 39(3), pages 239-252.
    16. Holl, Adelheid, 2004. "Manufacturing location and impacts of road transport infrastructure: empirical evidence from Spain," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 341-363, May.
    17. Wu, Haoyi & Guo, Huanxiu & Zhang, Bing & Bu, Maoliang, 2017. "Westward movement of new polluting firms in China: Pollution reduction mandates and location choice," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 119-138.

    More about this item

    Keywords

    Firm location; environmental regulations;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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