The Porter Hypothesis Revisited: The Cross-Border Spillover Effects of Foreign Environmental Regulations on National Competitiveness

Su-Yol Lee and Jeongdae Yim

Hitotsubashi Journal of Economics, 2025, vol. 66, issue 1, 28-45

Abstract: This study extends the Porter hypothesis by adopting a cross-border approach because, in a hyper-globalized economy, the impact of foreign policies might diffuse across borders through international trade. We examine the cross-border spillover effects of foreign environmental policies on innovation and economic growth of other countries. Using a country-year panel dataset, our study empirically finds that environmental policy spillovers contribute to improving green innovations, total factor productivity, and gross domestic product growth of other countries, which implies the borderless effect of the Porter hypothesis.

Keywords: cross-border spillovers; environmental policy stringency; the porter hypothesis; green innovation; total factor productivity; gross domestic product growth (search for similar items in EconPapers)
JEL-codes: F63 O33 O44 Q55 Q56 Q58 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:66:y:2025:i:1:p:28-45

DOI: 10.15057/hje.2025002

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