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The effect of environmental decentralization on polluting industries in India


  • Stefania Lovo


This paper examines the unintended effects of the 2006 reform of the Environmental Impact Assessment (EIA) process in India using firm-level data for the period 1998-2012. The reform favored a decentralization process by delegating the responsibility over environmental clearance of certain activities to state-level authorities. The results show that variations in the strength of environmental enforcement across states has resulted in an increase of births for polluting industries affected by the reform in states with lower level of enforcement.

Suggested Citation

  • Stefania Lovo, 2014. "The effect of environmental decentralization on polluting industries in India," GRI Working Papers 143, Grantham Research Institute on Climate Change and the Environment.
  • Handle: RePEc:lsg:lsgwps:wp143

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    References listed on IDEAS

    1. Kathuria, Vinish, 2007. "Informal regulation of pollution in a developing country: Evidence from India," Ecological Economics, Elsevier, vol. 63(2-3), pages 403-417, August.
    2. Somik Vinay Lall & Sanjoy Chakravorty, 2005. "Industrial Location and Spatial Inequality: Theory and Evidence from India," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 47-68, February.
    3. Duvivier, Chloé & Xiong, Hang, 2013. "Transboundary pollution in China: a study of polluting firms' location choices in Hebei province," Environment and Development Economics, Cambridge University Press, vol. 18(04), pages 459-483, August.
    4. repec:wsi:wschap:9789813141094_0009 is not listed on IDEAS
    5. Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2012. "Do agglomeration economies reduce the sensitivity of firm location to tax differentials?," Economic Journal, Royal Economic Society, vol. 122(563), pages 1069-1093, September.
    6. Judith M. Dean & Mary E. Lovely & Hua Wang, 2017. "Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China," World Scientific Book Chapters,in: International Economic Integration and Domestic Performance, chapter 9, pages 155-167 World Scientific Publishing Co. Pte. Ltd..
    7. Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2012. "International taxation and multinational firm location decisions," Journal of Public Economics, Elsevier, vol. 96(11), pages 946-958.
    8. Holl, Adelheid, 2004. "Manufacturing location and impacts of road transport infrastructure: empirical evidence from Spain," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 341-363, May.
    9. Sigman, Hilary, 2005. "Transboundary spillovers and decentralization of environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 82-101, July.
    10. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
    11. World Bank, 2006. "India - Strengthening Institutions for Sustainable Growth : Country Environmental Analysis," World Bank Other Operational Studies 19628, The World Bank.
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    1. repec:wsi:jeapmx:v:19:y:2017:i:03:n:s1464333217500168 is not listed on IDEAS

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