Pollution Control in a Transition Economy: Do Firms Face Economies and/or Diseconomies of Scale?

Dietrich Earnhart and Lubomir Lizal

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: We empirically assess whether firms face economies and/or diseconomies of scale with respect to air pollution control by evaluating the effects of production on firmlevel air emission levels using a panel of Czech firms during the country’s transitional period of 1993 to 1998. By estimating a separate set of production-related coefficients for each individual sector, the analysis permits economies/diseconomies of scale to differ across sectors. More important, the analysis allows these scale effects to vary over time, which seems critical in the context of a transition economy, as the Czech government was tightening air protection polices by imposing more stringent emission limits and escalating emission charge rates. To assess whether these tighter policies expanded economies of scale, the analysis controls for heterogeneity across individual firms by examining intrafirm variation in emissions and production

Keywords: Czech Republic; environmental protection; pollution; production; economies of scale. (search for similar items in EconPapers)
JEL-codes: D21 D62 Q53 (search for similar items in EconPapers)
Date: 2010-02
New Economics Papers: this item is included in nep-env, nep-reg and nep-tra
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Citations: View citations in EconPapers (2)

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