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Some Micro-Evidence on the "Porter Hypothesis" from Austrian VOC Emission Standards

  • Thomas Roediger-Schluga

This paper presents some micro-evidence relevant to the "Porter Hypothesis" on the techno-economic consequences of Austrian Volatile Organic Compound (VOC) emission standards, the most restrictive of their kind in the world. Using firm-level survey data and complementing it with highly disaggregated foreign trade data, the paper explores whether the standards had a palpable impact on the competitiveness of Austrian manufacturers of paints, coatings, printing inks, and adhesives, whether compliance stimulated innovation in this industry, whether the standards crowded out other, more productive Research and Development (R&D), and whether compliance efforts gave rise to unexpected benefits of compliance. It finds no unequivocal aggregate impact on the competitiveness of regulated firms, yet does find some interesting variation with firm size. Moreover, the standards appear to have dampened import competition. The standards gave rise to considerable changes in firms' product range and appear to have accelerated the rate of product innovation in the regulated industry. R&D spending to develop compliant products is found to be very unevenly distributed, mainly due to technological and, to a lesser extent, organizational factors. There is evidence that compliance efforts displaced or postponed existing R&D projects. However, there is also evidence that search for compliant products yielded unexpected and beneficial ideas, knowledge, and competencies. Copyright 2003 Gatton College of Business and Economics, University of Kentucky..

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Article provided by Wiley Blackwell in its journal Growth and Change.

Volume (Year): 34 (2003)
Issue (Month): 3 ()
Pages: 359-379

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Handle: RePEc:bla:growch:v:34:y:2003:i:3:p:359-379
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  1. Xepapadeas, A. & de Zeeuw, A.J., 1998. "Environmental Policy and Competitiveness : The Porter Hypothesis and the Composition of Capital," Discussion Paper 1998-38, Tilburg University, Center for Economic Research.
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  9. Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Working Papers 7297, National Bureau of Economic Research, Inc.
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