Regulation Market or Social Pressure? Determinants of Environmental Investments in the Industrial Sector

IPEA Working Paper No. 863

23 Pages Posted: 31 May 2002

See all articles by Claudio Ferraz

Claudio Ferraz

University of California, Berkeley - Department of Agricultural & Resource Economics; Institute of Applied Economic Research (IPEA)

Ronaldo Seroa da Motta

Universidade do Estado do Rio de Janeiro (UERJ)

Date Written: March 2002

Abstract

This study is an attempt to analyze the probability of industrial firms in Sao Paulo to undertake environmental investments utilizing a database from the 1996 economic industrial survey Paep together with economic and social of the location where production units are located. To carry this on, a Probit model is employed to estimate marginal effects of firm's characteristics and formal and informal regulation. Taking into account simultaneity of decisions between firms and regulator, instrumented variables are used. Results suggest informal regulation act indirectly on firm's decisions on investment through regulators. Size, export-orientation and origin of capital are also significant variables explaining the environmental investment pattern.

Note: The downloadable document is written in Portuguese.

Keywords: environmental regulation, informal regulation, environmental investment, probit, instrumented variables, selection problems

JEL Classification: Q13

Suggested Citation

Ferraz, Claudio and Seroa da Motta, Ronaldo, Regulation Market or Social Pressure? Determinants of Environmental Investments in the Industrial Sector (March 2002). IPEA Working Paper No. 863, Available at SSRN: https://ssrn.com/abstract=311366 or http://dx.doi.org/10.2139/ssrn.311366

Claudio Ferraz (Contact Author)

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

Institute of Applied Economic Research (IPEA) ( email )

Av. Presidente Antonio Carlos 51
16 andar, Castelo
RJ 20020-010 Rio de Janeiro
Brazil
+55 21 3804-8000 (Phone)
+55 21 2240-1920 (Fax)

Ronaldo Seroa da Motta

Universidade do Estado do Rio de Janeiro (UERJ) ( email )

Av Borges de Medeiros 3709 ap 401
ap 401
Lagoa, 22470-001
Brazil
21997775494 (Phone)

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