Business Intelligence

Environmental Inspection Proclivity And State Manufacturing Growth: The US Experience From The 1990s

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Executive Summary

In this paper, the authors construct a ranking of states based on their proclivity to inspect facilities for environmental compliance. The measure utilizes state-level inspections data supplied by the US Environmental Protection Agency. After developing the ranking, they use it to predict state-level growth in manufacturing establishments. In doing so, they find support for the notion that enforcement intensity adversely impacts such growth. The results offer insight into why existing studies that examine the impact of environmental regulation on location and growth produce inconsistent results.

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