The Limits of Limited Liability: Evidence from Industrial Pollution
研究母公司对子公司环境清理费用的责任如何影响工业污染和生产，发现加强有限责任保护导致子公司有毒排放增加5%至9%，主要源于减排投资减少而非产量增加。
ABSTRACT We study how parent liability for subsidiaries' environmental cleanup costs affects industrial pollution and production. Our empirical setting exploits a Supreme Court decision that strengthened parent limited liability protection for some subsidiaries. Using a difference‐in‐differences framework, we find that stronger liability protection for parents leads to a 5% to 9% increase in toxic emissions by subsidiaries. Evidence suggests the increase in pollution is driven by lower investment in abatement technologies rather than increased production. Cross‐sectional tests suggest convexities associated with insolvency and executive compensation drive heterogeneous effects. Overall, our findings highlight the moral hazard problem associated with limited liability.