Abstract
Regional economic disparity and environmental sustainability are two prioritized areas of societal concern. By focusing on how societal support and company ambitions influence firms' decisions, this paper reveals the tension between environmental sustainability and attempts to create a balance between regions. The paper describes the consequences of allocation of environmental effects for and of regional economic disparity and thereby highlights a dualistic causality. A case study illustrates the point by focusing on transportation and location decisions. The paper concludes that the delicate dilemma of allocating environmental effects is a matter of balancing various interests, hence indicating a paradox. The paradox extends between regional economic disparity and environmental sustainability but also between societal concerns and firms' decisions. The paper contributes to the debate on sustainability by indicating that allocation of environmental effects is not as straightforward as corporate social responsibility suggests. The paper also contributes to research on regional economic disparities by indicating that focusing attention on environmental effects may have regional consequences and thereby potentially threaten other goals set by society.
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