 Environmental spillovers and local agglomeration: Evidence from large plant openingsTaehyun Kim and Yaeji Lim Journal of Behavioral and Experimental Finance, 2024, vol. 43, issue C Abstract: This paper investigates the impact of agglomeration on the spillover effects of corporate environmental performance by exploiting quasi-natural experiments involving Million Dollar Plant (MDP) openings. Analyzing plant-level toxic emissions and pollution prevention data from the U.S., we find that large MDP openings prompt neighboring incumbent plants to emit more toxic chemicals compared to those from facilities in runner-up counties. Neighboring plants in winning counties also reduce their pollution control measures. Prior to the MDP events, we observe comparable trends in pollution emissions and balanced sample characteristics. Furthermore, the increase in toxic emissions is more pronounced in regions with lenient environmental regulations. The findings suggest that increased financial constraints, due to higher production costs from local agglomeration, may drive these negative environmental externalities. Keywords: Large plant opening; Spillover effects of agglomeration; ESG; Toxic emissions; Pollution prevention; Environmental regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:43:y:2024:i:c:s2214635024000832 DOI: 10.1016/j.jbef.2024.100968 Access Statistics for this article Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber More articles in Journal of Behavioral and Experimental Finance from Elsevier |
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