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Environmental inspection proclivity and state manufacturing growth: the US Experience from the 1990s

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  • Christopher Decker
  • John Maxwell

Abstract

In this paper we construct a ranking of states based on their proclivity to inspect facilities for environmental compliance. Our measure utilizes state-level inspections data supplied by the US Environmental Protection Agency. After developing our ranking, we use it to predict state-level growth in manufacturing establishments. In doing so, we find support for the notion that enforcement intensity adversely impacts such growth. Our results offer insight into why existing studies that examine the impact of environmental regulation on location and growth produce inconsistent results.
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Suggested Citation

  • Christopher Decker & John Maxwell, 2012. "Environmental inspection proclivity and state manufacturing growth: the US Experience from the 1990s," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 263-282, February.
    • Handle: RePEc:spr:anresc:v:48:y:2012:i:1:p:263-282
    DOI: 10.1007/s00168-010-0371-y
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    References listed on IDEAS

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    1. Lyon,Thomas P. & Maxwell,John W., 2004. "Corporate Environmentalism and Public Policy," Cambridge Books, Cambridge University Press, number 9780521819473, January.
    2. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    4. List, John A. & Co, Catherine Y., 2000. "The Effects of Environmental Regulations on Foreign Direct Investment," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 1-20, July.
    5. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, vol. 86(4), pages 789-813, September.
    6. John A. List & W. Warren McHone, 2000. "Ranking State Environmental Outputs: Evidence from Panel Data," Growth and Change, Wiley Blackwell, vol. 31(1), pages 23-39.
    7. Gray, Wayne B. & Deily, Mary E., 1996. "Compliance and Enforcement: Air Pollution Regulation in the U.S. Steel Industry," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 96-111, July.
    8. Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta‐Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49, February.
    9. Dion, Catherine & Lanoie, Paul & Laplante, Benoit, 1998. "Monitoring of Pollution Regulation: Do Local Conditions Matter?," Journal of Regulatory Economics, Springer, vol. 13(1), pages 5-18, January.
    10. Paul E. Polzin, 2001. "Why Some States Grow Faster than Others: New Growth Models for State Economic Policy," Growth and Change, Wiley Blackwell, vol. 32(3), pages 413-425.
    11. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
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    More about this item

    Keywords

    K32; Q28; R58;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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