Economics
Environmental Regulation, Investment Timing, and Technology Choice
Document Type
Article
Abstract
We test whether environmental regulation affects investment decisions, using Census data for individual paper mills. New mills in states with strict environmental regulations choose cleaner production technologies, with differences in air and water pollution regulation also influencing technology choice. Examining investment allocation across existing plants, we find that abatement and productive investment tend to be scheduled together. However, plants with high abatement investment over the entire period spend significantly less on productive capital. This seems to reflect both environmental investment ‘crowding out* productive investment within a plant, and firms shifting investment towards plants facing less stringent abatement requirements.
Publication Title
The Journal of Industrial Economics
Publication Date
2003
Volume
46
Issue
2
First Page
235
Last Page
256
ISSN
1467-6451
DOI
10.1111/1467-6451.00070
Keywords
environmental regulation, paper mills, technology choice
Repository Citation
Gray, Wayne B. and Shadbegian, Ronald J., "Environmental Regulation, Investment Timing, and Technology Choice" (2003). Economics. 105.
https://commons.clarku.edu/faculty_economics/105