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The Clean Air Act Amendments and Firm Investment in Pollution Abatement Equipment

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Listed:
  • Amanda I. Lee
  • AJames Alm

Abstract

The command-and-control approach to environmental regulation requires that firms install prescribed technologies to meet specified goals. However, environmental regulations change frequently; in addition, the enforcement agency cannot perfectly monitor firm compliance. We examine the impact of uncertainties surrounding the enactment and the enforcement of the Clean Air Act Amendments of 1990 on firm investment in air pollution abatement equipment. We find that our measures of the likelihood ofCAAA passage clearly affect a firm’s investment in pollution equipment. Enforcement actions also affect a firm’s investment, but these effects are weaker and are statistically significant only after enactment.

Suggested Citation

  • Amanda I. Lee & AJames Alm, 2004. "The Clean Air Act Amendments and Firm Investment in Pollution Abatement Equipment," Land Economics, University of Wisconsin Press, vol. 80(3), pages 433-447.
    • Handle: RePEc:uwp:landec:v:80:y:2004:i:3:p:433-447
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    Cited by:

    1. Zhu, Zhaohui & Tan, Yafei, 2022. "Can green industrial policy promote green innovation in heavily polluting enterprises? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 59-75.
    2. Joseph T. Mahoney & Anita M. McGahan & Christos N. Pitelis, 2009. "Perspective ---The Interdependence of Private and Public Interests," Organization Science, INFORMS, vol. 20(6), pages 1034-1052, December.
    3. Jaraite, Jurate & Kažukauskas, Andrius & Lundgren, Tommy, 2012. "Determinants of Environmental Expenditure and Investment: Evidence from Sweden," CERE Working Papers 2012:7, CERE - the Center for Environmental and Resource Economics.
    4. Wilson, Nathan E., 2012. "Uncertain regulatory timing and market dynamics," International Journal of Industrial Organization, Elsevier, vol. 30(1), pages 102-115.
    5. Sheng Yao & Weiwei Zhang, 2020. "Is Private Entrepreneurs’ Religiosity Conducive to Environmental Investment? Evidence from China," Sustainability, MDPI, vol. 12(4), pages 1-17, February.
    6. Stefanie Haller & Liam Murphy, 2012. "Corporate Expenditure on Environmental Protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 277-296, February.
    7. Mazzanti, Massimiliano & Zoboli, Roberto, 2007. "Environmental Efficiency, Emission Trends and Labour Productivity: Trade-Off or Joint Dynamics? Empirical Evidence Using NAMEA Panel Data," Climate Change Modelling and Policy Working Papers 9320, Fondazione Eni Enrico Mattei (FEEM).
    8. Rui Pang & Minjun Shi & Dan Zheng, 2022. "Who comply better? The moderating role of firm heterogeneity on the performance of environmental regulation in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6302-6326, May.
    9. Fei Peng & Langchuan Peng & Jie Mao & Peng Lu, 2021. "The Short-Run Effect of a Local Fiscal Squeeze on Pollution Abatement Expenditures: Evidence from China’s VAT Pilot Program," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(3), pages 453-485, March.
    10. Min-Dong Paul Lee & Michael Lounsbury, 2015. "Filtering Institutional Logics: Community Logic Variation and Differential Responses to the Institutional Complexity of Toxic Waste," Organization Science, INFORMS, vol. 26(3), pages 847-866, June.
    11. Jurate Jaraite & Andrius Kazukauskas & Tommy Lundgren, 2014. "The effects of climate policy on environmental expenditure and investment: evidence from Sweden," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 3(2), pages 148-166, July.
    12. Aillery, Marcel P. & Gollehon, Noel R. & Johansson, Robert C. & Kaplan, Jonathan D. & Key, Nigel D. & Ribaudo, Marc, 2005. "Managing Manure To Improve Air And Water Quality," Economic Research Report 33593, United States Department of Agriculture, Economic Research Service.

    More about this item

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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