Environmental Regulation and Productivity: New Findings on the Porter Hypothesis

Paul Lanoie (), Michel Patry () and Richard Lajeunesse
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Paul Lanoie: IEA, HEC Montréal, http://www.hec.ca/iea/
Michel Patry: IEA, HEC Montréal, http://www.hec.ca/iea/

No 01-05, Cahiers de recherche from HEC Montréal, Institut d'économie appliquée

Abstract: This paper provides an empirical analysis of the relationship between the stringency of environmental regulation and total factor productivity (TFP) growth in the Quebec manufacturing sector. This allows us to investigate more fully the Porter hypothesis in three directions. First, the dynamic aspect of the hypothesis is captured through the use of lagged regulation variables. Second, we argue that the hypothesis is more relevant for more polluting sectors. Third, we argue that the hypothesis is more relevant for sectors which are more exposed to international competition. Our empirical results suggest that : 1) the contemporaneous impact of environmental regulation on productivity is negative, 2) the opposite result is observed with lagged regulation variables and 3) this effect is stronger in a sub-group of industries which are more exposed to international competition.

Keywords: Porter hypothesis; environmental regulation; productivity. (search for similar items in EconPapers)
Pages: 16 pages
Date: 2001-09
New Economics Papers: this item is included in nep-law and nep-tid
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Citations: View citations in EconPapers (4)

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