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

Stefan Ambec, Mark Cohen, Stewart Elgie and Paul Lanoie ()
Additional contact information
Paul Lanoie: IEA, HEC Montréal, http://www.hec.ca/iea/

No 10-02, Cahiers de recherche from HEC Montréal, Institut d'économie appliquée

Abstract: 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.

Keywords: Porter Hypothesis; environmental policy; innovation; performance. (search for similar items in EconPapers)
Pages: 21 pages
Date: 2010-07
New Economics Papers: this item is included in nep-cse, nep-env, nep-his, nep-ind, nep-ino and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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http://www.hec.ca/iea/cahiers/2010/iea1002_planoie.pdf (application/pdf)

Related works:
Journal Article: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2013)
Working Paper: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2011)
Working Paper: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2010)
Working Paper: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2010)
Working Paper: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2010)
Working Paper: The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? (2010)
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