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THIRD‐PARTY CERTIFICATION AND THE EFFECTIVENESS OF VOLUNTARY POLLUTION ABATEMENT PROGRAMS: EVIDENCE FROM RESPONSIBLE CARE
Author(s) -
Vidovic Martina,
Delgado Michael S.,
Khaneha
Publication year - 2019
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12818
Subject(s) - certification , variety (cybernetics) , instrumental variable , turnover , exploit , product certification , third party , identification (biology) , panel data , business , pollution , selection bias , public economics , economics , environmental economics , econometrics , computer science , computer security , management , ecology , medicine , internet privacy , pathology , artificial intelligence , biology
We analyze whether third‐party certification has been successful in improving the performance of voluntary pollution abatement in the Responsible Care (RC) program which made certification mandatory from 2005 onward. We use facility‐level panel data from 821 plants between 1996 and 2010, and exploit the change in the program requirements to estimate the causal impact of third‐party certification on participating facility emissions compared to non‐RC plants in the U.S. chemical industry. We address endogenous selection into RC via instrumental variables, and explore heterogeneity in the treatment effect. We find that, on average, there is no statistically discernible effect of third‐party certification on facility emissions, and that this result is robust to a variety of models that correspond to different assumptions related to identification. ( JEL Q53, Q58, L60)