 The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?Stefan Ambec, Mark Cohen, Stewart Elgie and Paul Lanoie Review of Environmental Economics and Policy, 2013, vol. 7, issue 1, 2-22 Abstract: Some twenty years ago, Harvard Business School economist and strategy professor Michael Porter challenged conventional wisdom about the impact of environmental regulation on business 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 profitable opportunities existed to reduce pollution, profit-maximizing firms would already be taking advantage of them. Over the past twenty years, much has been written about what has since become known simply as the Porter Hypothesis. Yet even today, we continue to find conflicting evidence concerning the Porter Hypothesis, alternative theories that might explain it, and oftentimes a misunderstanding of what the Porter Hypothesis does and does not say. This article examines the key theoretical foundations and empirical evidence concerning the Porter Hypothesis, discusses its implications for the design of environmental regulations, and outlines directions for future research on the relationship between environmental regulation, innovation, and competitiveness. (JEL:Q58, O38, F18) Copyright 2013, Oxford University Press. Date: 2013 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:renvpo:v:7:y:2013:i:1:p:2-22 Ordering information: This journal article can be ordered from Access Statistics for this article Review of Environmental Economics and Policy is currently edited by Robert Stavins More articles in Review of Environmental Economics and Policy from Association of Environmental and Resource Economists Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC. |
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