EPA's voluntary 33/50 Program: Impact on toxic releases and economic performance of firms

This paper examines the motivations for participation in the voluntary 33/5 0 Program and the program's impact on the toxic releases and economic perfo rmance of firms in the U.S. chemical industry. It demonstrates that the ben efits due to public recognition and the potentially avoided costs of liabil ities and compliance under mandatory environmental regulations provide stro ng incentives for participation. After controlling for sample selection bia s and the impact of other firm-specific characteristics, this paper shows t hat program participation led to a statistically significant decline in tox ic releases over the period 1991-93. The program also had a statistically s ignificant negative impact on the current return on investment of firms, bu t its impact on the expected long run profitability of firms was positive a nd statistically significant. (C) 1999 Academic Press.