Why do Manufacturing Plants Invest in Environmental Management?

Maria Ruiz-Tagle

No 20.2006, Environmental Economy and Policy Research Working Papers from University of Cambridge, Department of Land Economics

Abstract: While economic and contractual incentives encourage firms to respond to environmental issues, additional contributing factors also provide incentives for them to deal with corporate environmental issues. That is, formal regulation (government monitoring and enforcement) can promote firms’ environmental improvements, but so can informal regulation (consumer pressure, shareholders, employees and local communities). Environmental regulation, in the broadest sense, may affect firms’ decision to implement an Environmental Plan and the attitude of firms towards the environment. However, other characteristics of plants and firms are also relevant elements when taking these decisions. But which are those factors, and how can we assess their impact? The purpose of this paper is to develop a framework that can be used to test empirically the importance of several possible sources of influence on the level of environmental responsiveness of a firm. This paper uses new data from a survey carried out in Chile in year 2001.

Keywords: plants; investment; environment; monitoring; enforcement; consumer; Chile; incentive; corporate; regulation; impact; responsiveness; 2001 (search for similar items in EconPapers)
Date: 2006, Revised 2006
New Economics Papers: this item is included in nep-env and nep-reg
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