Environmental Regulations and Managerial Myopia

Armin Schmutzler

No 9903, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: It has recently been claimed that, contrary to popular perception, suitably chosen environmental regulation is often beneficial for the regulated firms because it induces cost-reducing innovations. I analyze to which extent this position is compatible with microeconomic analysis. It turns out that even in a framework in which organizational inefficiencies might lead to underinvestment, environmental policy can only increase firm profits if several very specific conditions are met. These conditions concern the type of policy, the extent of inefficiencies, the costs of potential innovation projects and their effect on productivity and abatement costs.

Keywords: environmental regulation; internal inefficiencies; innovation offsets; managerial myopia (search for similar items in EconPapers)
JEL-codes: Q51 Q58 (search for similar items in EconPapers)
Date: 1998-11
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Environmental and Resource Economics 18, 2001, pages 87-100

Downloads: (external link)
https://www.zora.uzh.ch/id/eprint/51852/1/wp9903.pdf First version, 1999 (application/pdf)

Related works:
Journal Article: Environmental Regulations and Managerial Myopia (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:9903

Access Statistics for this paper

More papers in SOI - Working Papers from Socioeconomic Institute - University of Zurich Contact information at EDIRC.
Bibliographic data for series maintained by Severin Oswald ().