Do Facilities with Distant Headquarters Pollute More? How Civic Engagement Conditions the Environmental Performance of Absentee Managed Plants

Abstract

Scholars agree that due to advances in transportation and communication technologies, firms can extend their reach and more easily externalize their pollution by setting up plants in far-flung, less regulated areas. They also concur that absentee managed plants or facilities with remote headquarters are rapidly becoming the modal type of industrial organization. However, they have yet to examine the environmental performance of these plants and how their propensity to pollute is conditioned by the types of communities that harbor them. This reflects a more general failure on the part of social scientists to study the impact that different organizational forms have on the physical environment. Using the EPA's newly published 2000 Toxics Release Inventory, we test the direct and interactive effects of absentee management on the environmental performance of chemical plants in the U.S. Findings reveal that absentee managed plants emit more toxins, on average, than other plants. However, when we take into account the amount of chemicals that plants have on-site and other factors that influence facilities' emissions, we discover that the environmental performance of absentee managed plants is no worse than that of other plants. Whether plants with distant headquarters emit more toxins largely depends on the presence of local institutions that facilitate civic engagement. When embedded in communities with more associations, churches, and third places, absentee managed plants emit significantly fewer toxins. [End Page 189]