Geographic location of nuclear power plants: love thy neighbour as thyself?

Abstract

ABSTRACT Countries have incentives to geographically locate high-risk industries outside their own jurisdiction or close to the borders with neighbours. Nuclear power-plants (NPPs) are a good example of high-risk economic activity. The average distance of existing NPPs from neighbouring country borders was only 41 miles, implying that the location planning of NPPs considers the host country’s efforts to impose negative externality on neighbours. Empirical analyses indicate that countries choose to place the NPPs away from their major cities and close to the borders with another country. The distances of NPPs from borders are affected by the riskiness of the plants and the relative sizes of the countries.