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Violation of environmental regulations as a disinvestment in social capital

  • Gren, Ing-Marie

    ()

    (Department of Economics, Swedish University of Agricultural Sciences)

  • Andersson Franko, Mikael

    (Department of Economics, Swedish University of Agricultural Sciences)

  • Holstein, Fredrik

    (Department of Economics, Swedish University of Agricultural Sciences)

This paper developed a simple dynamic model in order to analyse the impact of social capital on violation of environmental regulations. Two main channels of influence were identified; through informal enforcement of regulations and through effects on costs from disinvestment in social capital caused by violation. The model was tested using survey data on enforcement and violation of command and control regulations at municipalities and counties in Sweden. Four different measures on the social capital variable were used; general trust, trust in local and national governments, and organizational activity. Count data models were used for estimating the explanatory power of these variables in relation to inspection frequency and control variables of community characteristics. Statistically best results were obtained for organizational activity for all firm categories. The results showed that both the level of this social capital measure and its growth over time curb violation.

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File URL: http://pub.epsilon.slu.se/11115/
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Paper provided by Department Economics, Swedish University of Agricultural Sciences in its series Working Paper Series with number 2014:4.

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Length: 35 pages
Date of creation: 09 Apr 2014
Date of revision:
Handle: RePEc:hhs:slueko:2014_004
Contact details of provider: Postal: Department of Economics, Box 7013, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden
Phone: 018-67 1724
Fax: 018-67 3502
Web page: http://www.slu.se/ekonomi

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