Local Environmental Regulation and Plant-Level Productivity
September 2010
Working Paper Number:
CES-10-30R
Abstract
This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb-Douglas production functions that include a measure of the stringency of environmental regulation faced by manufacturing plants. In contrast to previous studies, this paper examines effects on plants in all manufacturing industries, not just those in 'dirty' industries. Further, this paper employs spatial-temporal variation in environmental compliance costs to identify effects, using a time-varying county-level index that is based on multiple years of establishment-level data from the Pollution Abatement Costs and Expenditures survey and the Annual Survey of Manufactures. Results suggest that, for the average manufacturing plant, the effect on productivity of being in a county with higher environmental compliance costs is relatively small and often not statistically significant. For the average plant, the main effect of environmental regulation may not be in the spatial and temporal dimensions.
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:
production,
economist,
manufacturing,
industrial,
manufacturer,
produce,
efficiency,
expenditure,
regulated,
regulation,
regulatory,
regulation productivity,
emission,
pollution,
refinery,
environmental regulation,
plant productivity,
environmental,
pollutant,
plants industry,
polluting,
pollution abatement,
plant employment,
polluting industries,
manufacturing plants
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:
Census of Manufactures,
Annual Survey of Manufactures,
Standard Industrial Classification,
Center for Economic Studies,
Cobb-Douglas,
Establishment Micro Properties,
PAOC,
Pollution Abatement Costs and Expenditures,
National Ambient Air Quality Standards
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