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Does entrepreneurial behaviour matter for the strong Porter hypothesis?

Author

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  • Dominique Bianco

    (Université de Bourgogne-France-Comté, LEDi)

Abstract

The traditional economic argument states that compliance with environmental policy diverts resources from innovation. In their paper, Porter and van der Linde (1995) argue counterintuitively that more stringent environmental policies induce innovations the benefits of which exceed the costs. We build an R&D-driven endogenous growth model that takes account of both arguments by including satisficing and profit-maximizing managers. Our theoretical results enable us to determine the validity condition of the strong Porter hypothesis that is consistent with empirical results.

Suggested Citation

  • Dominique Bianco, 2022. "Does entrepreneurial behaviour matter for the strong Porter hypothesis?," Economics Bulletin, AccessEcon, vol. 42(2), pages 867-876.
    • Handle: RePEc:ebl:ecbull:eb-21-00171
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P73.pdf
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    Keywords

    Endogenous growth; Environmental Porter hypothesis; Environmental policy; Entrepreneurial Behaviours;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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