Environmental Abatement Costs and Establishment Size
Daniel L. Millimet
The impact of environmental abatement costs on the size distribution of manufacturing establishments in pollution-intensive industries is analyzed. Utilizing both state- and industry-specific measures of environmental regulation, a new and important interaction is discovered: Establishment size increases with state environmental abatement costs, but only in industries during periods of relatively high (national) pollution abatement intensity. Increased state environmental stringency during times when similar industries located in other states are not undertaking sufficient abatement expenditures leads to a decrease in establishment size. (JEL "L11", "L51", "R38") Copyright 2003 Western Economic Association International.
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