This paper analyzes the determinants of plant decision regarding the pollution abatement expenditure, in the context of transition economy. We use a panel dataset, containing information related to the pollution abatement expenditure at plant level, plant – specific characteristics, state and local regulatory stringency, market incentives and community characteristics. The results of the estimation indicate that all the variable coefficients have the expected signs but some variables are not statistically significant. The both community characteristics- and environmental taxes does not matter in the plant decision regarding the Pollution Abatement Expenditure.