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Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods

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Listed:
  • John A. List

    (Department of Economics, College of Business, University of Central Florida, Orlando, FL 32816-1400, USA)

  • W. Warren McHone

    (Department of Economics, College of Business, University of Central Florida, Orlando, FL 32816-1400, USA)

Abstract

In this article, we use annual (1980-90) county-level manufacturing plant location data for New York State to examine the effects of the 1977 Clean Air Act Amendments on the location decisions of new pollution-intensive manufacturing plants in the &ldquo:neo-regulatory" (1980-84) and "mature-regulatory" (1985-90) phases of the Act's implementation. Our results suggest that the temporal effects of regulation vary. Whereas the location decisions of pollution intensive manufacturing firms were unaffected by the Act's regulatory restrictions in the "neo-regulatory" period, the restrictions appear to have had a significant negative impact on the location decisions of these types of firms in the Act's "mature-regulatory" phase. The diversion of new pollution intensive plants to counties with less stringent environmental regulations suggests that current US environmental regulations may be leading to a "browning process" whereby counties historically free of pollution become havens for polluters.

Suggested Citation

  • John A. List & W. Warren McHone, 2000. "Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 177-190.
    • Handle: RePEc:spr:presci:v:79:y:2000:i:2:p:177-190
    Note: Received: 2 April 1999
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    Keywords

    Firm location; environmental regulations;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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