IDEAS home Printed from https://ideas.repec.org/p/esr/wpaper/wp347.html
   My bibliography  Save this paper

Corporate Expenditure on Environmental Protection

Author

Listed:
  • Haller, Stefanie
  • Murphy, Liam

Abstract

We examine the determinants of firm's current environmental expenditure and firm's capital investment in equipment for pollution control using a Heckman selection model. As regards current environmental expenditure, we find that larger, exporting firms and firms subject to the Integrated Pollution Prevention and Control directive are more likely to spend resources at all. Once the decision to commit resources has been taken, larger firms, firms that are foreign-owned, and firms that report low shares of water and refuse charges in turnover have higher absolute levels of environmental expenditure. With respect to investment in equipment for pollution control, we find that energy intensive and exporting firms are more likely to invest at all. Once the decision to invest has been taken, larger firms and firms that report high water and refuse charges invest more in equipment for pollution control. This suggests that the firms for whom environmental concerns are most costly in terms of production and image do most to address them.

Suggested Citation

  • Haller, Stefanie & Murphy, Liam, 2010. "Corporate Expenditure on Environmental Protection," Papers WP347, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:wp347
    as

    Download full text from publisher

    File URL: http://www.esri.ie/pubs/WP347.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cole, Matthew A. & Elliott, Robert J.R. & Shimamoto, Kenichi, 2006. "Globalization, firm-level characteristics and environmental management: A study of Japan," Ecological Economics, Elsevier, vol. 59(3), pages 312-323, September.
    2. Jūratė Jaraitė & Frank Convery & Corrado Di Maria, 2010. "Transaction costs for firms in the EU ETS: lessons from Ireland," Climate Policy, Taylor & Francis Journals, vol. 10(2), pages 190-215, March.
    3. 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.
    4. Emilio Galdeano-Gómez, 2010. "Exporting and Environmental Performance: A Firm-level Productivity Analysis," The World Economy, Wiley Blackwell, vol. 33(1), pages 60-88, January.
    5. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    6. Alan Collins & Richard I. D. Harris, 2002. "Does Plant Ownership Affect the Level of Pollution Abatement Expenditure?," Land Economics, University of Wisconsin Press, vol. 78(2), pages 171-189.
    7. Alan Collins & Richard I. D. Harris, 2005. "The Impact Of Foreign Ownership And Efficiency On Pollution Abatement Expenditure By Chemical Plants: Some Uk Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(5), pages 747-768, November.
    8. Aden, Jean & Kyu-hong, Ahn & Rock, Michael T., 1999. "What is Driving the Pollution Abatement Expenditure Behavior of Manufacturing Plants in Korea?," World Development, Elsevier, vol. 27(7), pages 1203-1214, July.
    9. 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.
    10. Shadbegian Ronald J & Gray Wayne B, 2003. "What Determines Environmental Performance at Paper Mills? The Roles of Abatement Spending, Regulation, and Efficiency," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-20, November.
    11. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    12. Roeland Bracke & Tom Verbeke & Veerle Dejonckheere, 2008. "What Determines the Decision to Implement EMAS? A European Firm Level Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 499-518, December.
    13. Anna Alberini & Kathleen Segerson, 2002. "Assessing Voluntary Programs to Improve Environmental Quality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 157-184, June.
    14. Kaiser, Kai & Schulze, Günther G., 2003. "International Competition and Environmental Expenditures: Empirical Evidence from Indonesian Manufacturing Plants," HWWA Discussion Papers 222, Hamburg Institute of International Economics (HWWA).
    15. 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.
    16. Frances Ruane & Julie Sutherland, 2005. "Export Performance and Destination Characteristics of Irish Manufacturing Industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(3), pages 442-459, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    2. Sascha Rexhäuser & Christian Rammer, 2014. "Environmental Innovations and Firm Profitability: Unmasking the Porter Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 145-167, January.
    3. John P. Weche Geluebcke & Isabella Wedl, 2013. "Environmental Protection of Foreign Firms in Germany: Does the country of origin matter?," Working Paper Series in Economics 267, University of Lüneburg, Institute of Economics.
    4. Robert Sova & Christophe Rault & Guglielmo Caporale & Anamaria Sova, 2014. "Improving Environmental Performance: A Challenge for Romania," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(3), pages 431-452, March.
    5. Stefan Borsky & Esther Blanco, 2014. "Setting one voluntary standard in a heterogeneous Europe - EMAS, corruption and stringency of environmental regulations," Working Papers 2014-29, Faculty of Economics and Statistics, University of Innsbruck.
    6. 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.

    More about this item

    Keywords

    capital expenditure on pollution abatement/environmental expenditure/firm-level analysis/manufacturing/investment;

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp347. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarah Burns). General contact details of provider: http://edirc.repec.org/data/esriiie.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.