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Environmental regulation as a barrier to the formation of small manufacturing establishments: a longitudinal examination. (English) Zbl 1057.91508

Summary: This paper estimates the effect of environmental regulations on the formation of small manufacturing establishments. Examining new business formations across 170 manufacturing industries over a ten-year span suggested that a greater intensity of environmental regulation is associated with fewer small business formations. There were no effects on the formation of large establishments, implying that environmental regulations put small entrants at a unit cost disadvantage. This finding is consistent with our arguments for compliance asymmetries, enforcement asymmetries, and statutory asymmetries.

MSC:

91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
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