Economic and Environmental Performances in the U.S. Manufacturing Industries Between 1988 and 2005

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Fall 2016


This research reassesses the relationship between environmental and economic performances in the U.S. manufacturing sector from 1988 to 2005. This paper uses information on NAICS-based 410 manufacturing industries from the NBER Manufacturing Productivity database and EPA's Pollution Abatement Costs and Expenditures survey and TRI database. Performing different econometric techniques and focusing on toxic releases and input productivities, a strong, consistent, and heterogeneous positive link between environmental and economic performances have been noted. Abatement costs always hamper labor, capital, and materials productivities. A presence of economies-of-sale is realized as larger industries show better environmental performances by emitting less toxics. A dirtier industry incurs more abatement costs.

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