Does Plant Ownership Affect the Level of Pollution Abatement Expenditure?

Abstract

This paper considers a number of hypotheses. Primary among them is the notion that foreign-owned plants spend more on pollution abatement than do domestically owned plants after controlling for productive efficiency and cognizant of the prevailing regulatory regime. The evidence drawn upon in the first econometric assessment of this contention is plant level data from the U.K. metal manufacturing industry. In essence, this study directly estimates the influence of ownership and efficiency characteristics in firms’ decisions regarding whether to spend or not on pollution control and how much to spend. (JEL Q25)