Are Hazardous Substance Rankings Effective? An Empirical Investigation of Information Dissemination about the Relative Hazards of Chemicals and Emissions Reductions

34 Pages Posted: 12 Oct 2017 Last revised: 23 Jan 2018

See all articles by Wayne Fu

Wayne Fu

University of Michigan at Dearborn - College of Business

Basak Kalkanci

Georgia Institute of Technology - Scheller College of Business

Ravi Subramanian

Georgia Institute of Technology - Scheller College of Business

Date Written: January 10, 2018

Abstract

Whether information dissemination about chemical hazards drives managers at facilities to undertake corresponding environmental actions, remains an open question that has not been adequately examined in the literature. We fill this gap in the literature by empirically investigating reductions in chemical emissions by facilities in relation to changes in the assessed hazard levels of chemicals evidenced in periodically-updated public information. We also examine the moderating effects of operational leanness – an attribute that prior studies have shown to be associated with better environmental performance – in our setting wherein the assessed hazard levels of chemicals change over time. We draw data from four US sources – the Substance Priority List from the Agency for Toxic Substances and Disease Registry, the Toxics Release Inventory from the EPA, the National Establishment Time-Series, and Compustat. We employ a panel model with facility-chemical- and time-fixed effects. We find that public information dissemination on chemical hazards is effective, as indicated by the significant association between increases in the assessed hazard levels of chemicals and greater subsequent emissions reductions. Specifically, we find that facilities reduce emissions by an additional 4.28% on average and their use of source reduction increases by 3.07% on average when the relative assessed hazard level of a chemical increases compared to when it decreases. We find that, overall, leaner facilities outperform less lean facilities with respect to emissions reductions. However, when the assessed hazard level increases, less lean facilities increase their emissions reductions more than leaner facilities. Our findings provide insights for managers prioritizing environmental actions, including the extent of emissions reductions achievable by practicing lean. Our results can also be leveraged by governmental/non-governmental organizations to anticipate responses to informational updates on chemical hazards, depending on characteristics of the affected facilities.

Keywords: environmental operations, hazardous chemicals, lean operations, information dissemination, TRI

JEL Classification: M1

Suggested Citation

Fu, Wayne and Kalkanci, Basak and Subramanian, Ravi, Are Hazardous Substance Rankings Effective? An Empirical Investigation of Information Dissemination about the Relative Hazards of Chemicals and Emissions Reductions (January 10, 2018). Georgia Tech Scheller College of Business Research Paper No. 17-39. Available at SSRN: https://ssrn.com/abstract=3051725 or http://dx.doi.org/10.2139/ssrn.3051725

Wayne Fu

University of Michigan at Dearborn - College of Business ( email )

Fairlane Center South
19000 Hubbard Drive
Dearborn, MI 48126-2638
United States

Basak Kalkanci (Contact Author)

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Ravi Subramanian

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
33
Abstract Views
292
PlumX Metrics