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Does Competition Prevent Industrial Pollution? Evidence from a Panel Threshold Model

Polemis, Michael and Stengos, Thanasis (2017): Does Competition Prevent Industrial Pollution? Evidence from a Panel Threshold Model.

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Abstract

The scope of this paper is to assess the impact of competition on industrial toxic pollution by using for the first time, a panel threshold model which allows evaluating the main drivers of toxic releases under two different market regimes. The empirical analysis is based on a micro level panel data set over the five year-period 1987-2012. We show that this relationship is statistically significant and robust above and below the threshold, even after accounting for alternative specifications of market concentration. Finally, we unmask an inverted “V-shaped” relationship between market concentration and industrial pollution.

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