Firm behavior and pollution in small geographies

Dakshina De Silva, Robert P. McComb, Anita Schiller and Aurélie Slechten

European Economic Review, 2021, vol. 136, issue C

Abstract: We consider the relationship between the location choices of potentially polluting firms and local income. Unlike previous research in the area of environmental justice, we distinguish between pollution potential and actual releases of toxic substances in the locality. We explore the relationship between the profit maximizing behavior of potentially polluting firms in their choice of both location and expenditures to influence the likelihood of toxic releases and their expected financial costs. We proxy the expenditures on prudential behavior by observing the co-localization of waste remediation activities. Evidence supports the conclusion that firms behave rationally in managing risk of toxic release, which may result in disparities in exposure to toxic releases faced by certain population groups.

Keywords: Environment and toxic release; Profit maximizing behavior; Firm localization; Waste management; And firm entry (search for similar items in EconPapers)
JEL-codes: L2 Q2 R1 R3 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Firm Behavior and Pollution in Small Geographies (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:136:y:2021:i:c:s0014292121000957

DOI: 10.1016/j.euroecorev.2021.103742

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