This research examines the effects of the 1977 Clean Air Act Amendments
(CAAA) on the location decisions of pollution-intensive manufacturing plants. We
develop a panel data set to analyze plant births of polluting manufacturers over time
as a function county-level attainment status of the federal standard for ozone pollution.
We find that more stringent county-level environmental regulations impact
pollution-intensive capital flows through deterring new plant births. We also find that
the impact of stricter regulations varies by pollution-intensity of manufacturers, with
results suggesting that federal guidelines have a greater impact on high pollution
intensive manufacturers than more moderate polluters
