The economic costs of environmental regulations have been widely debated since the US
began to restrict pollution emissions more than four decades ago. Using detailed production
data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of
Manufactures, we estimate the effects of air quality regulations on manufacturing plants' total
factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air
quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations …

The article focuses on the study of environmental regulations and their impact on
productivity in US As suggested by Porter hypothesis, productivity increases over time by
environmental regulations as they provide incentive for efficient restructuring of operations.
Opposing Porter hypotheis, the results of the estimation of air pollution regulations between
1972 and 1993 suggest that a 4.8 percent decrease in productivity of US firms has been
noticed.