When and Why do Plants Comply? Paper Mills in the 1980s*

This paper uses census data for 116 pulp and paper mills over the period 1979–1990 to examine the determinants of compliance with air pollution regulations. Several plant characteristics are significant: large plants, old plants, and pulp mills comply less frequently, as do plants with water pollution or OSHA violations, but firm characteristics generally are not significant. Enforcement activity increases compliance, but in a heterogeneous way: pulp mills are less sensitive to inspections, while plants owned by larger firms are less sensitive to inspections and more sensitive to “other” enforcement actions, consistent with the authors’ expectations and prior research results.