A must read paper. All of Randy Becker's papers are excellent and show off the quality of data in the US.
I have been trying to look at this issue using other country data but any paper is always going to be of a lower quality due to data issues (and natural talent issues).
On Spatial Heterogeneity in Environmental Compliance Costs
By: Randy Becker
This paper examines the extent of variation in regulatory stringency below the state level, using establishment-level data from the U.S. Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) survey to estimate a county-level index of environmental compliance costs (ECC). County-level variation is found to explain 11-18 times more of the variation in ECC than state-level variation alone, and the range of ECC within a state is often large. At least 34% of U.S. counties have ECC that are statistically different from their states’. Results suggest that important spatial variation is lost in state-level studies of environmental regulation.
Keywords: environmental costs, regulation, manufacturing, U.S. counties