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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Competition; Concentration; Threshold; Non-linearities; Inverted “V-shaped”
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C24 - Truncated and Censored Models ; Switching Regression Models ; Threshold Regression Models; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects

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