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Environmental Compliance by Firms in the Manufacturing Sector in Mexico

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  • Lata Gangadharan

Abstract

To date, little empirical evidence exists to help regulators understand why some firms comply even when there is little financial incentive to do so and others continually violate environmental regulations. This paper examines data on compliance with environmental regulations within the manufacturing sector in Mexico. The probability of complying depends, among other factors, on the kind of management practices of the firm and the level of environmental training. Some firms in the manufacturing sector over-comply with regulations. Our results show that providing environmental training to employees in the firm increases the probability of over-compliance. Local community has a positive impact on over-compliance however the magnitude of its impact is not as strong as is often suggested in the literature.

Suggested Citation

  • Lata Gangadharan, 2003. "Environmental Compliance by Firms in the Manufacturing Sector in Mexico," Department of Economics - Working Papers Series 881, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:881
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-03/881.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lan, Jing & Munro, Alistair, 2013. "Environmental compliance and human capital: Evidence from Chinese industrial firms," Resource and Energy Economics, Elsevier, vol. 35(4), pages 534-557.
    2. Gaoussou DIARRA & Sébastien MARCHAND, 2011. "Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries?," Working Papers 201112, CERDI.
    3. Lopamudra Chakraborti & Michael Margolis, 2017. "Do industries pollute more in poorer neighborhoods? Evidence from toxic releasing plants in Mexico," Economics Bulletin, AccessEcon, vol. 37(2), pages 853-870.
    4. Luken, Ralph & Van Rompaey, Frank & Zigová, Katari­na, 2008. "The determinants of EST adoption by manufacturing plants in developing countries," Ecological Economics, Elsevier, vol. 66(1), pages 141-152, May.
    5. Dietrich Earnhart, 2013. "Effect of Systems to Manage Environmental Aspects on Environmental Performance," Sustainability, MDPI, Open Access Journal, vol. 5(6), pages 1-32, June.
    6. Singh, Neelam & Jain, Suresh & Sharma, Prateek, 2015. "Motivations for implementing environmental management practices in Indian industries," Ecological Economics, Elsevier, vol. 109(C), pages 1-8.
    7. del Río González, Pablo, 2009. "The empirical analysis of the determinants for environmental technological change: A research agenda," Ecological Economics, Elsevier, vol. 68(3), pages 861-878, January.
    8. Rikhardsson, Pall & Best, Peter & Green, Peter & Rosemann, Michael, 2006. "Business Process Risk Management, Compliance and Internal Control: A Research Agenda," Management Accounting Research Group Working Papers M-2006-05, University of Aarhus, Aarhus School of Business, Department of Business Studies.
    9. Earnhart, Dietrich & Harrington, Donna Ramirez, 2014. "Effect of audits on the extent of compliance with wastewater discharge limits," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 243-261.
    10. Claudia Poser & Edeltraud Guenther & Marc Orlitzky, 2012. "Shades of green: using computer-aided qualitative data analysis to explore different aspects of corporate environmental performance," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 413-450, January.

    More about this item

    Keywords

    Environmental regulation; Compliance; Mexico;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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