ABSTRACT
The results reported here show that the locations of branch plants of large firms are more sensitive to state characteristics than are plants in general, and that these branch plants appear to be deterred by stringent environmen tal regulations, as measured by a variety of different proxies for state environmental stringency. However, only a few of the coefficients on the measures of environmental stringency are statistically significant and none is large. Furtherm ore, the degree of aversion to stringent states does not seem to increase for pollution-intensive industries, which suggests either that the stringency proxies used are capturing some other state characteristic, or that pollution intensity is inversely correlated with an omitted variable such as geographic footlooseness.
