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The Effects of Environmental Policy Stringency on Firms' Performances: Focusing on Korean Manufacturing Industry

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  • Jinhee Lee
  • Cheol Jong Song

Abstract

This study analysed how stringent environmental policy affects firms' performances in Korean manufacturing. The environmental policy stringency index published by the OECD was used as the main explanatory variable. As for the firms' performances variables, real total cost, real total sales and real EBIT were used, which capture the impact‐response‐outcome of environmental policies, respectively. By and large environmental policy stringency had a negative effect. Environmental policy stringency also had a more delayed effect on EBIT than on cost and sales. In addition, firms responded differently to the cost increase by firms' characteristics such as size and financial soundness.

Suggested Citation

  • Jinhee Lee & Cheol Jong Song, 2025. "The Effects of Environmental Policy Stringency on Firms' Performances: Focusing on Korean Manufacturing Industry," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 39(2), pages 47-60, November.
    • Handle: RePEc:bla:apacel:v:39:y:2025:i:2:p:47-60
    DOI: 10.1111/apel.12441
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    References listed on IDEAS

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    5. Nick Bloom & Christos Genakos & Ralf Martin & Raffaella Sadun, 2010. "In brief: Modern Management: Good for the environment or just hot air?," CentrePiece - The magazine for economic performance 303, Centre for Economic Performance, LSE.
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