Environmental Regulations and Plant Exit

Erik Biorn, Rolf Golombek and Arvid Raknerud

Environmental & Resource Economics, 1998, vol. 11, issue 1, 35-59

Abstract: A qualitative response model is applied to study the relationship between environmental regulations and plant exit. The data set is Norwegian panel data for establishments in three manufacturing sectors that have high shares of units which have been under strict environmental regulations. In two of the sectors, the estimated exit probability of regulated establishments is, ceteris paribus, only one third of the exit probability of non-regulated establishments. We also find that the probability to change regulation status from being non-regulated to become regulated depends significantly on economic factors. In particular, establishments with weak profitability had the highest probability to come under environmental regulation. Copyright Kluwer Academic Publishers 1998

Keywords: environmental economics; environmental standards; firm exit; logit model; panel data (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (19)

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DOI: 10.1023/A:1008276509284

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