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Does entrepreneurial behaviour matter for the strong Porter hypothesis?

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  • Dominique Bianco

    (Université de Bourgogne-France-Comté, LEDi)

Abstract

The traditional economic argument states that compliance with environmental policy diverts resources from innovation. In their paper, Porter and van der Linde (1995) argue counterintuitively that more stringent environmental policies induce innovations the benefits of which exceed the costs. We build an R&D-driven endogenous growth model that takes account of both arguments by including satisficing and profit-maximizing managers. Our theoretical results enable us to determine the validity condition of the strong Porter hypothesis that is consistent with empirical results.

Suggested Citation

  • Dominique Bianco, 2022. "Does entrepreneurial behaviour matter for the strong Porter hypothesis?," Economics Bulletin, AccessEcon, vol. 42(2), pages 867-876.
    • Handle: RePEc:ebl:ecbull:eb-21-00171
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    References listed on IDEAS

    as
    1. Brännlund, Runar & Lundgren, Tommy, 2009. "Environmental policy without costs? A review of the Porter hypothesis," Umeå Economic Studies 766, Umeå University, Department of Economics.
    2. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
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    11. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    12. Dominique Bianco & Evens Salies, 2017. "The Strong Porter Hypothesis in an Endogenous Growth Model with Satisficing Managers," Economics Bulletin, AccessEcon, vol. 37(4), pages 2641-2654.
    13. Karen Palmer & Wallace E. Oates & Paul R. Portney & Karen Palmer & Wallace E. Oates & Paul R. Portney, 2004. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 3, pages 53-66, Edward Elgar Publishing.
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    18. Gollop, Frank M & Roberts, Mark J, 1983. "Environmental Regulations and Productivity Growth: The Case of Fossil-Fueled Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 654-674, August.
    19. Aghion, Philippe & Howitt, Peter, 1996. "Research and Development in the Growth Process," Journal of Economic Growth, Springer, vol. 1(1), pages 49-73, March.
    20. Rassier, Dylan G. & Earnhart, Dietrich, 2015. "Effects of environmental regulation on actual and expected profitability," Ecological Economics, Elsevier, vol. 112(C), pages 129-140.
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    22. Brännlund, Runar & Lundgren, Tommy, 2009. "Environmental policy without costs? A review of the Porter hypothesis," Sustainable Investment and Corporate Governance Working Papers 2009/1, Sustainable Investment Research Platform.
    23. Dominique Bianco & Evens Salies, 2017. "The Strong Porter Hypothesis in an Endogenous Growth Model with Satisficing Managers," Post-Print hal-02177939, HAL.
    24. Dominique Bianco, 2017. "Environmental Policy in an Endogenous Growth Model with Expanding Variety," Revue d'économie politique, Dalloz, vol. 127(6), pages 1013-1028.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Endogenous growth; Environmental Porter hypothesis; Environmental policy; Entrepreneurial Behaviours;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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