Are native plants green? Assessing environmental performances of locally-owned facilities

42 Pages Posted: 20 Apr 2021

See all articles by Narae Lee

Narae Lee

University of Minnesota - Twin Cities - Carlson School of Management

Jiao Luo

University of Minnesota - Twin Cities - Carlson School of Management

Date Written: April 20, 2021

Abstract

We study the impact of corporate ownership and community conditions on firm environmental pollution. While the existing literature often thinks of environmental pollution as a unitary construct, we emphasize the distinction between toxic emissions, which have immediate but locally bounded impact, and greenhouse gas (GHG) emissions which have gradual but global impact, producing climate change. Using a facility-level panel of all manufacturing facilities in the US from 2010-2018, and leveraging within-facility changes in ownership status, we show that locally owned firms have lower levels of toxic emissions, but they are also less likely to report GHG emissions, and have higher levels of such emissions when they do report them, with these effects being stronger where the owner is not only headquartered locally, but has operations limited to that state. Our study suggests that while the pressures of local embeddedness may drive firms to be more environmentally responsible towards their local community, they also make firms more indifferent to their global environmental impact.

Keywords: environmental performance, ownership, toxic emissions, greenhouse gas, climate change, sustainability

JEL Classification: M14, Q54, D22

Suggested Citation

Lee, Narae and Luo, Jiao, Are native plants green? Assessing environmental performances of locally-owned facilities (April 20, 2021). Available at SSRN: https://ssrn.com/abstract=3830153 or http://dx.doi.org/10.2139/ssrn.3830153

Narae Lee

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Jiao Luo (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

321 19th Ave. S
CSOM 3-360
Minneapolis, MN 55455
United States
1-612-626-1907 (Phone)

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