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George Kapetanios, Steven Ongena, Alexia Ventouri, Huiyan Xiao · 2026-05-21
A plain-English AI summary of what this paper means for investors — generated on demand from the abstract.
This paper examines how firm-level determinants of industrial emissions evolve over time as firms adapt to environmental regulation, economic conditions, and organisational constraints. Using a panel of 204 U.S. industrial facilities observed from 1992 to 2023, we link facility-level emissions from the Toxics Release Inventory to firm financial characteristics, managerial attributes, local labour-market conditions, and aggregate macroeconomic indicators. We employ a time-varying mean-group estimator that allows average relationships to change smoothly over time while accommodating persistent heterogeneity across facilities. We find several covariates display episodic associations with emissions growth. The results reveal pronounced stage-like dynamics in emissions determinants, with firm-level characteristics and aggregate conditions dominating in different periods. From an innovation-policy perspective, the findings highlight that firms' responses to environmental regulation are time-dependent and shaped by their adaptive capacity.
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