Economics
Environmental regulation, investment timing, and technology choice
Document Type
Book Chapter
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
Economic Costs and Consequences of Environmental Regulation
Publication Date
2002
First Page
353
Last Page
374
ISBN
9781315188010
DOI
10.4324/9781315188010
Keywords
environmental regulation, economic impact, policy
Repository Citation
Gray, Wayne B. and Shadbegian, Ronald J., "Environmental regulation, investment timing, and technology choice" (2002). Economics. 109.
https://commons.clarku.edu/faculty_economics/109