This paper investigates the extent to which firm level technological change that reduces unregulated emissions is driven by regulatory pressures, and firms' technological and organizational capabilities. Using a treatment effects model with panel data for a sample of S&P 500 firms over the period 1994-1996, we find that organizational change in the form of Total Quality Environmental Management leads firms to adopt pollution prevention practices, after controlling for the effects of various regulatory pressures and firm-specific characteristics. We find that the threat of anticipated regulations and the presence of 'complementary assets' is important for creating the incentives and an internal capacity to undertake incremental adoption of pollution prevention techniques.

Original languageEnglish (US)
Pages (from-to)85-106
Number of pages22
JournalEnvironmental and Resource Economics
Issue number1
StatePublished - Aug 2009


  • Environmental management
  • Total Quality Management
  • Toxic releases

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law


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