The Porter Hypothesis Revisited: A Literature Review of Theoretical Models and Empirical Tests
AbstractThe debate on the relationship between environmental regulation and competitiveness has been a topic of discussion for a number of years now. As early as 1991, the American economist Michael E. Porter proposed that stringent environmental regulation (under the condition that it is efficient) can lead to win-win situations, in which social welfare as well as the private net benefits of firms operating under such regulation can be increased. This paper analyses the Porter hypothesis with regard to two aspects. Firstly, it will analyse the theoretical reasoning behind the hypothesis by discussing and analyzing the arguments brought forward in favour of and against the hypothesis based on the discussion of different theoretical analyses and models by various authors in the field. Secondly, the paper reviews influential empirical studies trying to test the Porter hypothesis. The analysis of empirical work will allow (at least to some degree) to assess whether theoretical conclusions about the Porter hypothesis are confirmed by empirical research.
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Length: 50 pages
Date of creation: 25 Jul 2004
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Porter Hypothesis; Empirical Testing; Theoretical Hypothesis; Environment; Economy; Innovation; Regulation;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-02 (All new papers)
- NEP-HIS-2004-08-02 (Business, Economic & Financial History)
- NEP-MIC-2004-08-02 (Microeconomics)
- NEP-REG-2004-08-02 (Regulation)
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