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Fundação Getúlio Vargas Escola De Administração De Empresas De São Paulo

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Fundação Getúlio Vargas Escola De Administração De Empresas De São Paulo FUNDAÇÃO GETÚLIO VARGAS ESCOLA DE ADMINISTRAÇÃO DE EMPRESAS DE SÃO PAULO LUCIANA RIBEIRO CHALELA FIRMS REACTION TO ENVIRONMENTAL REGULATION SÃO PAULO JULY 2013 LUCIANA RIBEIRO CHALELA FIRMS REACTION TO ENVIRONMENTAL REGULATION This thesis is submitted to the EAESP Fundação Getúlio Vargas in partial fulfillment of the requirements for the degree of Doctor of Philosophy. Field: Financial Markets and Corporate Finance Supervisor: William Eid Junior,Ph.D. SÃO PAULO JULY 2013 2 Chalela, Luciana R. Firms Reaction to Environmental Regulation/ Luciana Ribeiro Chalela - 2013. 100 f. Orientador: William Eid Junior. Tese (doutorado) - Escola de Administração de Empresas de São Paulo. 1. Controle de poluição. 2. Poluição. 3. Política ambiental. 4. Mudanças climáticas. I. Eid Junior, William. II. Tese (doutorado) - Escola de Administração de Empresas de São Paulo. III. Título. CDU 504.06 3 Undoubtedly this thesis is dedicated to my mom, my most passionate supporter, to whom I always return to find the strength to persevere. 4 ACKNOWLEDGEMENTS I am grateful to CAPES (Coordination for the Improvement of Higher Education Personnel) and to GVPesquisa (Fundação Getúlio Vargas Research Institute) for granting doctorate fee exemptions. I am also thankful to Dr. Ely Laureano Paiva, Director of the PhD Program at Fundação Getúlio Vargas – Brazil, and Dr. Angel Diaz, Director of the PhD Program at the Instituto de Empresa – Spain, for their consideration and patience and for recognizing the unique nature of my case: a dual degree agreement that respects the needs of both institutions. The wisdom of both directors in the decision-making process was crucial to making this research possible, and I express my appreciation to them. It is difficult to express in a few lines the paramount importance of my advisor, Dr. William Eid Junior, in the doctoral process. I remember my happiness the day that he agreed to be my advisor and how honored I felt to work with such a successful professional in my area. That admiration has grown constantly over the past five years because of his timely and effective interventions. I express my deep gratitude to his extensive support and his decisions that have benefitted my research and my improvement as a researcher. I am also thankful to his assistant, Brielen Madureira, for her readiness to help me on the bureaucratic matters. I am also indebted to Dr. Ricardo Ratner Rochman and Dr. Rafael Felipe Schiozer for their valuable suggestions during my proposal defense and my final defense. Their guidelines gave me the necessary direction to successfully complete this work. Indeed, I am truly grateful for the inputs 5 received from Dr. Andrea Minardi and Dr. Mario Monzoni, members of my committee on my final defense. During the completion of my doctoral course work at the Fundação Getúlio Vargas - Brazil and the Instituto de Empresas – Spain, I worked with many excellent professors at both institutions who motivated me and with many supportive classmates who became great friends. It s difficult to named all of them here; therefore I want to express my gratitude to all of them through persons that were present friends during all this long process. In Brazil, my ex- classmate and friend, Dr. Cristiane Benetti, has been a constant supporter during my doctoral path. In Spain, I was blessed to meet two future PhDs, Mudra Mukesh and Michele Esteves Martins, to whom I am especially grateful for helping me persevere through the difficult times and for all the emotional support and care they provided. I would like to express my gratitude to the encouragement words I received from Professor Dilney Gonçalves, my FGV classmate Eduardo Hiramoto and also from Saul de Medeiros, Daniel Karvik, Leonice Ribeiro and Ingrid Stela,. I would also like to express my deep gratitude to my family for their love and support during this long and exhaustive process. I am grateful to my mom, Eunice Ribeiro Chalela, who has been my biggest supporter, offering frequent advice, believing in my success, and providing emotional and financial support during the critical phases of this process. I am thankful for my sister, Simone Chalela, who encouraged my exchange period abroad and ensured that my needs were met. I am in indebted to my brother-in-law, Tarso Andrade Santos, 6 for his extensive support during the programming of the thesis database; his assistance helped make this thesis possible. Finally, I am grateful to all the people who understand the complexity of the doctoral process and the need for long periods of exclusive commitment and focus to this work. Their understanding and support helped me find the strength to embrace this long and challenging research journey. 7 LIST OF CONTENTS ACKNOWLEDGEMENTS ....................................................................................................................... 5 LIST OF CONTENTS ............................................................................................................................... 8 LIST OF TABLES ..................................................................................................................................... 9 LIST OF FIGURES .................................................................................................................................10 ABSTRACT .............................................................................................................................................11 INTRODUCTION ...................................................................................................................................12 CHAPTER I – LITERATURE REVIEW ...................................................................................................... 19 1. Regulation and competitiveness ........................................................................................................... 20 1.1. Pollution Haven Hypothesis ................................................................................................................ 24 1.2. Contrary hypothesis ................................................................................................................................ 43 Factor Endowment Hypothesis ............................................................................................................................................... 44 Footloose Theory ............................................................................................................................................................................ 46 Pollution Halo Hypothesis .......................................................................................................................................................... 48 Porter Hypothesis .......................................................................................................................................................................... 50 CHAPTER II – DATASET DESCRIPTION ................................................................................................ 54 CHAPTER III – POLLUTION HAVEN TEST ............................................................................................ 61 3.1. Method .......................................................................................................................................................... 63 3.2. Model.............................................................................................................................................................. 63 Difference-in-difference .............................................................................................................................................................. 63 Difference-in-difference-in-difference ................................................................................................................................. 65 3.3. Sample Construction ............................................................................................................................... 66 CHAPTER IV – RESULTS .............................................................................................................................. 76 Difference-in-difference .............................................................................................................................................................. 76 Difference-in-difference-in-difference ................................................................................................................................. 79 Major Results .................................................................................................................................................................................... 81 CHAPTER V – CONCLUSIONS .................................................................................................................... 84 Discussion .......................................................................................................................................................................................... 84 Limitations and Future Research............................................................................................................................................ 87 Final considerations ...................................................................................................................................................................... 88 REFERENCES .........................................................................................................................................90
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