What Kinds of Firms Are More Sensitive to Public Disclosure Programs for Pollution Control? The Case of Indonesia’s PROPER Program
This paper analyzes differences in firms’ responsiveness to PROPER, Indonesia’s public disclosure program for industrial pollution control. The overall effectiveness of this program at achieving emissions reductions and its low regulatory costs earned it a good reputation around the world. PROPER had no deterrents or incentives other than those that arose indirectly from publicly disclosing information about the environmental performances of firms. We analyzed plant-level data to relate short- and longer-term environmental responses to facility characteristics. The results revealed that foreign-owned firms were consistently more likely to respond to the environmental rating scheme, compared to private domestic firms. This is a clear and important insight with consequences for a number of issues, such as understanding the pollution haven debate. Also, firms located in densely populated regions, particularly in Java, responded more positively to the public disclosure of PROPER ratings. The main observed effect, however, occurred at the initial level of environmental performance of firms. Those firms that had bad environmental performance records felt pressure to improve, but once the initial abatement steps had been taken, the incentives to improve further appeared to diminish.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Khanna, Madhu & Quimio, Wilma Rose H. & Bojilova, Dora, 1998. "Toxics Release Information: A Policy Tool for Environmental Protection," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 243-266, November.
- Eskeland, Gunnar S. & Harrison, Ann E., 2003.
"Moving to greener pastures? Multinationals and the pollution haven hypothesis,"
Journal of Development Economics,
Elsevier, vol. 70(1), pages 1-23, February.
- Gunnar A. Eskeland & Ann E. Harrison, 2002. "Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis," NBER Working Papers 8888, National Bureau of Economic Research, Inc.
- Eskeland, Gunnar S.*Harrison, Ann E., 1997. "Moving to greener pastures : multinationals and the pollution-haven hypothesis," Policy Research Working Paper Series 1744, The World Bank.
- Lanoie, Paul & Laplante, Benoit & Roy, Maite, 1998. "Can capital markets create incentives for pollution control?," Ecological Economics, Elsevier, vol. 26(1), pages 31-41, July.
- Dasgupta, Susmita & Laplante, Benoit & Mamingi, Nlandu, 2001. "Pollution and Capital Markets in Developing Countries," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 310-335, November.
- Hamilton James T., 1995. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 98-113, January.
- García López, Jorge & Sterner, Thomas & Afsah, Shakeb, 2009.
"Public Disclosure of Industrial Pollution: The PROPER Approach for Indonesia?,"
Working Papers in Economics
414, University of Gothenburg, Department of Economics.
- García, Jorge H. & Sterner, Thomas & Afsah, Shakeb, 2007. "Public disclosure of industrial pollution: the PROPER approach for Indonesia?," Environment and Development Economics, Cambridge University Press, vol. 12(06), pages 739-756, December.
- Afsah, Shakeb & Sterner, Thomas & López, Jorge, 2004. "Public Disclosure of Industrial Pollution: The PROPER Approach for Indonesia?," Discussion Papers dp-04-34, Resources For the Future.
- John List & Daniel Millimet, 2004.
"The Case of the Missing Pollution Haven Hypothesis,"
Natural Field Experiments
00493, The Field Experiments Website.
- Daniel Millimet & John List, 2004. "The Case of the Missing Pollution Haven Hypothesis," Journal of Regulatory Economics, Springer, vol. 26(3), pages 239-262, 08.
- Konar, Shameek & Cohen, Mark A., 1997. "Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 109-124, January.
- Blackman, Allen & Afsah, Shakeb & Ratunanda, Damayanti, 2000. "How Do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia," Discussion Papers dp-00-44, Resources For the Future.
- Devon Garvie & Andrew Keeler, 1993.
"Incomplete Enforcement with Endogenous Regulatory Choice,"
873, Queen's University, Department of Economics.
- Garvie, Devon & Keeler, Andrew, 1994. "Incomplete enforcement with endogenous regulatory choice," Journal of Public Economics, Elsevier, vol. 55(1), pages 141-162, September.
- Foulon, Jerome & Lanoie, Paul & Laplante, Benoit, 2002. "Incentives for Pollution Control: Regulation or Information?," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 169-187, July.
- Tom Tietenberg, 1998. "Disclosure Strategies for Pollution Control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 587-602, April.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-08-12-efd. 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: (Webmaster)
If references are entirely missing, you can add them using this form.