Rights statement: This is the author’s version of a work that was accepted for publication in European Economic Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in European Economic Review, 136, 2021 DOI: 10.1016/j.euroecorev.2021.103742
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Firm Behavior and Pollution in Small Geographies
AU - De Silva, Dakshina
AU - McComb, Robert P.
AU - Schiller, Anita
AU - Slechten, Aurelie
N1 - This is the author’s version of a work that was accepted for publication in European Economic Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in European Economic Review, 136, 2021 DOI: 10.1016/j.euroecorev.2021.103742
PY - 2021/7/31
Y1 - 2021/7/31
N2 - We consider the relationship between the location choices of potentiallypolluting firms and local income. Unlike previous research in the area ofenvironmental justice, we distinguish between pollution potential and actualreleases 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.
AB - We consider the relationship between the location choices of potentiallypolluting firms and local income. Unlike previous research in the area ofenvironmental justice, we distinguish between pollution potential and actualreleases 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.
KW - Environment and Toxic Release
KW - Profit Maximizing Behavior
KW - Firm Localization
KW - waste management
KW - Firm Entry
U2 - 10.1016/j.euroecorev.2021.103742
DO - 10.1016/j.euroecorev.2021.103742
M3 - Journal article
VL - 136
JO - European Economic Review
JF - European Economic Review
SN - 0014-2921
M1 - 103742
ER -