Matching property rights and transboundary ecological processes: The case of Norwegian salmon aquaculture

Abstract Transboundary ecological processes, such as the spread of pests and diseases, require management strategies that align property rights with the spatial scale of these processes. The existing literature is predominantly based on theoretical models and qualitative case studies, and has posited that coordinated management can often mitigate spatial externalities. However, robust causal assessments of the effects of coordinated management remain scarce. To address the issue empirically, we differentiate between the probability of an initial salmon lice infestation (the extensive margin) and the severity of infestation once it occurs (the intensive margin) using a uniquely comprehensive dataset from Norwegian salmon aquaculture. The findings reveal that while ownership concentration does not significantly alter the likelihood of infestation, it substantially reduces severity by enabling coordinated management practices. This divergence demonstrates that firm incentives vary across these two dimensions. Although the empirical setting focuses on salmon lice in salmon aquaculture, the findings carry broader implications for industries facing similar spatial‐dynamic externalities. In particular, ownership consolidation can encourage coordinated investments and interventions, potentially reducing the underinvestment typically observed when multiple firms share biologically connected resources.