Firm Behavior and Pollution in Small Geographies

41 Pages Posted: 20 Jun 2019

See all articles by Dakshina G. De Silva

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Robert P. McComb

Texas Tech University - Department of Economics

Anita R. Schiller

Department of Economics - Lancaster University Management School

Aurélie Slechten

Lancaster University

Date Written: June 12, 2019

Abstract

We consider the relationship between the location choices of potentially polluting firms and local income. Unlike previous research in the area of economic justice, we distinguish between pollution potential and actual releases of toxic substances in the locality. We explore the relationship between 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.

Keywords: Environment and Toxic Release, Profit Maximizing Behavior, Firm Localization, Agglomeration, and Firm Entry

JEL Classification: Q2, L2, R1, R3

Suggested Citation

De Silva, Dakshina G. and McComb, Robert P. and Schiller, Anita R. and Slechten, Aurélie, Firm Behavior and Pollution in Small Geographies (June 12, 2019). Available at SSRN: https://ssrn.com/abstract=3403115 or http://dx.doi.org/10.2139/ssrn.3403115

Dakshina G. De Silva (Contact Author)

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Robert P. McComb

Texas Tech University - Department of Economics ( email )

MS 41014
Lubbock, TX 79409-1014
United States
806 742-2466 x240 (Phone)

Anita R. Schiller

Department of Economics - Lancaster University Management School ( email )

Lancaster, LA1 4YX
United Kingdom

Aurélie Slechten

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
8
Abstract Views
114
PlumX Metrics