https://macropaperwarehouse.com/authors/nicholas-vreugdenhil/Nicholas VreugdenhilHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/dynamic-regulation-with-firm-linkages-evidence-from-texas/https://macropaperwarehouse.com/papers/dynamic-regulation-with-firm-linkages-evidence-from-texas/<p>This paper evaluates the efficiency of linked environmental regulation, a targeting mechanism whereby inspectors who discover violations at one plant can increase enforcement pressure on other plants sharing the same owner. The central research question is whether linking inspection decisions across co-owned plants adds value over unlinked, plant-level targeting and over random enforcement. The paper develops a new empirical framework of dynamic moral hazard under linked regulation, applies it to Texas environmental enforcement data, and uses the estimated model to evaluate counterfactual regulatory designs.</p>