There’s More Than Meets the Eye: Assessing the Impact of Immigrants on Firm Environmental Performance

Abstract

This study investigates how shifts in political attention across issue domains influence firm environmental performance. We theorize that heightened salience of migration—a politically charged and administratively demanding issue—can crowd out the state’s regulatory capacity in unrelated domains such as environmental protection. Drawing on a panel of U.S. manufacturing facilities, we find that increases in migration salience, measured by the volume of migration-related state legislation, are associated with higher levels of toxic pollution. We argue that this occurs as limited public resources and oversight shift toward migration enforcement, weakening the institutional constraints on firms. The effect is more pronounced as states have lower fiscal capacity. These findings are robust to an instrumental variable strategy and alternative specifications. By conceptualizing enforcement capacity as fluid and contested, this study offers new insights into how institutional crowding reshapes the regulatory environment and, in turn, affects firm behavior in the environmental domain.