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Environmental Protection and Economic Growth: What Do the Residuals Tell Us?

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  • John A. List
  • Mitch Kunce

Abstract

Conventional wisdom implies economic growth and environmental quality are incompatible policy objectives. Recent empirical evidence, however, suggests stringency of environmental regulations are only weakly (or not at all) associated with decreased manufacturing activity. This paper uses more recent (1982-1994) state-level panel data to test if environmental regulations affect manufacturing employment. Estimation results from our three-stage sample selection panel data model suggest that state environmental regulations adversely affect job growth in three of the four industries analyzed.

Suggested Citation

  • 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.
  • Handle: RePEc:uwp:landec:v:76:y:2000:i:2:p:267-282
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    Citations

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    Cited by:

    1. Bagliani Marco & Bravo Giangiacomo & Dalmazzone Silvana & Giaccaria Sergio & Golia Silvia, 2008. "Economic growth and environmental pressure: a worldwide panel analysis," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200812, University of Turin.
    2. Davis, David E. & Schluter, Gerald E., 2005. "Labor-Force Heterogeneity as a Source of Agglomeration Economies in an Empirical Analysis of County-Level Determinants of Food Plant Entry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(03), December.
    3. Oates, Wallace, 2001. "A Reconsideration of Environmental Federalism," Discussion Papers dp-01-54, Resources For the Future.
    4. Wolfgang Keller & Arik Levinson, 1999. "Environmental Compliance Costs and Foreign Direct Investment Inflows to U.S. States," NBER Working Papers 7369, National Bureau of Economic Research, Inc.
    5. 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.
    6. Chimeli, Ariaster B., 2007. "Growth and the environment: Are we looking at the right data?," Economics Letters, Elsevier, vol. 96(1), pages 89-96, July.
    7. 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.
    8. Randy A. Becker, 2011. "On Spatial Heterogeneity in Environmental Compliance Costs," Land Economics, University of Wisconsin Press, vol. 87(1), pages 28-44.
    9. Jeffrey Flory & Uri Gneezy & Kenneth Leonard & John List, 2012. "Sex, competitiveness, and investment in offspring: On the origin of preferences," Artefactual Field Experiments 00072, The Field Experiments Website.
    10. Kunce, Mitch & Shogren, Jason F., 2002. "On Environmental Federalism and Direct Emission Control," Journal of Urban Economics, Elsevier, vol. 51(2), pages 238-245, March.

    More about this item

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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