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The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?

  • Stefan Ambec
  • Mark A. Cohen
  • Stewart Elgie
  • Paul Lanoie

Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (PH). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward. Il y a bientôt vingt ans, Michael Porter, économiste et professeur de stratégie de la Harvard Business School, a remis en question le paradigme généralement accepté quant à l'impact des réglementations environnementales sur la performance d'affaires, en affirmant que des politiques environnementales bien conçues pouvaient en fait améliorer la compétitivité des entreprises. Jusqu'alors, le point de vue dominant, accepté par la quasi-totalité des économistes, stipulait que d'imposer aux entreprises de réduire une externalité comme la pollution réduisait nécessairement les options à leur disposition et, par définition, leurs profits. Après tout, s'il y a des opportunités profitables de réduire la pollution, les firmes qui maximisent leurs profits auraient dû les identifier par elles-mêmes. Depuis 20 ans, beaucoup de choses ont été écrites sur ce qu'il est convenu d'appeler l'Hypothèse de Porter. Aujourd'hui, il y a diverses théories pour expliquer l'Hypothèse de Porter. Les résultats empiriques ne sont pas concluants et il subsiste une certaine confusion sur ce que dit et ne dit pas l'Hypothèse de Porter. Ce texte présente un survol des grands enjeux théoriques et empiriques entourant l'Hypothèse de Porter, en tire les grandes implications en termes de politiques publiques et propose des avenues de recherche pour le futur.

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Paper provided by CIRANO in its series CIRANO Working Papers with number 2010s-29.

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Length: 21 pages
Date of creation: 01 Aug 2010
Date of revision:
Handle: RePEc:cir:cirwor:2010s-29
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