Entry and exit patterns of "toxic" firms

Dakshina G. De Silva (Lead / Corresponding author), Timothy P. Hubbard, Anita R. Schiller

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
152 Downloads (Pure)

Abstract

We pair an establishment-level dataset from Texas with public information available in the Toxics Release Inventory (TRI) to evaluate the standing of dirty industries in Texas census tracts with a focus on environmental justice concerns. The share of nonwhite residents in a tract is positively correlated with the number of TRI-reporting firms and an inverse-U-shaped relationship characterizes the number of TRI-reporting firms and a tract's median income. Even after controlling for factor prices and other covariates which might drive firm location decisions, entrants that report to the TRI are more likely to locate in areas with a higher share of nonwhite residents. Firms that report to the TRI are also more likely to enter areas with a low share college graduates. In contrast, the number of entrants from industries which do not have TRI reporters is negatively related to the percent of nonwhite residents in a tract. Firms in these non-reporting industries are also more likely to enter areas with a high share of college graduates. Polluters appear to agglomerate, raising concerns about both chemical releases being concentrated in certain tracts and also affecting nonwhite-dense areas disproportionately. The strength of these effects often depend on an urban/rural classification, with rural areas experiencing the most pronounced concerns. Moreover, TRI-reporting firms are less likely to exit the market relative to their peers which operate in the same industry but do not need to file TRI reports, suggesting releases may affect a region in the long-run.
Original languageEnglish
Pages (from-to)881-909
Number of pages29
JournalAmerican Journal of Agricultural Economics
Volume98
Issue number3
Early online date29 Feb 2016
DOIs
Publication statusPublished - Apr 2016

Keywords

  • Environmental justice
  • Environmental Kuznets curve
  • rm entry and exit

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