The Effects of Environmental Regulation on Business Location in the United States

Timothy J. Bartik

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Regional Economics and Spatial Analysis Climate Change Policy and Economics Energy, Environment, Economic Growth

Abstract

ABSTRACT This article empirically examines whether variations in state environmental regulations have affected the location of manufacturing branch plants by the Fortune 500 companies. Using several measures of environmental regulation, no statistically significant effects of environmental regulation on business location are found. For most manufacturing industries, the estimates are precise enough to rule out the possibility of large effects of environmental regulation on business location. For highly polluting industries, however, the variance in the estimates is quite large. We cannot rule out the possibility of effects of environmental regulation on the location of highly polluting industries that are large enough to be important to policymakers.

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References

1978Production Economics: A Dual Approach to Theory and Applications 1985Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States 1985The Effect of State and Local Taxes on Economic Growth: A Time Series--Cross Section Approach 1982Making business location decisions 1985Two Views of the Geographic Distribution of Unemployment

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