Do Health Risks Deter Corporate Pollution?
Author:
Preprint
- 1 January 2023
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
This paper examines whether health risks deter corporate chemical pollution. I exploit the variation in perceived health risks created by the US Report on Carcinogens, which officially recognizes cancer risks posed by industrial chemicals. I show that when a chemical is recognized as a carcinogen, aggregate pollution levels remain unaffected, but pollution-based market concentration increases. While individual firms lower pollution levels and pollution capacity, the largest polluters acquire assets and scale up polluting activities. Additional analyses suggest that these corporate responses represent a reallocation of litigation risk across firms, which benefit shareholders but fail to deter chemical pollution.Keywords
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