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Pollution Control in a Transition Economy: Do Firms Face Economies and/or Diseconomies of Scale?

Author

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  • Dietrich Earnhart
  • Lubomir Lizal

Abstract

We empirically assess whether firms face economies and/or diseconomies of scale with respect to air pollution control by evaluating the effects of production on firmlevel air emission levels using a panel of Czech firms during the country’s transitional period of 1993 to 1998. By estimating a separate set of production-related coefficients for each individual sector, the analysis permits economies/diseconomies of scale to differ across sectors. More important, the analysis allows these scale effects to vary over time, which seems critical in the context of a transition economy, as the Czech government was tightening air protection polices by imposing more stringent emission limits and escalating emission charge rates. To assess whether these tighter policies expanded economies of scale, the analysis controls for heterogeneity across individual firms by examining intrafirm variation in emissions and production

Suggested Citation

  • Dietrich Earnhart & Lubomir Lizal, 2010. "Pollution Control in a Transition Economy: Do Firms Face Economies and/or Diseconomies of Scale?," CERGE-EI Working Papers wp405, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  • Handle: RePEc:cer:papers:wp405
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    File URL: http://www.cerge-ei.cz/pdf/wp/Wp405.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kamil Galuscak & Lubomir Lizal, 2011. "The Impact of Capital Measurement Error Correction on Firm-Level Production Function Estimation," Working Papers 2011/09, Czech National Bank, Research Department.

    More about this item

    Keywords

    Czech Republic; environmental protection; pollution; production; economies of scale.;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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