Dynamic activity analysis model based win-win development forecasting under the environmental regulation in China

Shiyi Chen and Wolfgang Härdle

No 2012-002, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: Porter Hypothesis states that environmental regulation may lead to win-win opportunities, that is, improve the productivity and reduce the undesirable output simultaneously. Based on directional distance function, this paper proposes a novel dynamic activity analysis model to forecast the possibilities of win-win development in Chinese Industry between 2009 and 2049. The evidence reveals that the appropriate energy-saving and emission-abating regulation will result in both the improvement in net growth of potential output and the steadily increasing growth of total factor productivity. This favors Porter Hypothesis.

Keywords: dynamic activity analysis model; energy-saving and emission-abating; environmental regulation; win-win development (search for similar items in EconPapers)
JEL-codes: D24 O47 Q25 Q32 (search for similar items in EconPapers)
Date: 2012
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