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Environmental regulation and international competitiveness: a critical review

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  • Abay Mulatu

Abstract

In this paper, we critically review the literature on environmental regulation and competitiveness at a national level. The concept of international competitiveness (in relation to environmental regulation) is assessed in two broad schools of thought: neoclassical economics and the competitiveness school to which the Porter hypothesis belongs. We identify the pollution haven hypothesis (PHH) as the least common denominator for empirical evaluation of the main themes of these two competing schools of thought. As a minimum, one would need to find evidence on PHH to question the validity of the Porter hypothesis. A fully legitimate test of the Porter hypothesis should, inter alia, have a particular emphasis on the impact of well-designed environmental policies on high-value sectors of an economy. Examining the recent empirical literature on the PHH we find that the evidence remains inconclusive. This leaves the Porter hypothesis largely unscathed and challenges the widely-held view of the existence of a trade-off between economic performance and environmental quality.

Suggested Citation

  • Abay Mulatu, 2018. "Environmental regulation and international competitiveness: a critical review," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 17(1), pages 41-63.
  • Handle: RePEc:ids:ijgenv:v:17:y:2018:i:1:p:41-63
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    Citations

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    Cited by:

    1. Xiuqin Zhang & Xudong Shi & Yasir Khan & Taimoor Hassan & Mohamed Marie, 2023. "Carbon Neutrality Challenge: Analyse the Role of Energy Productivity, Renewable Energy, and Collaboration in Climate Mitigation Technology in OECD Economies," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    2. Ma, Fenfen & Saleem, Hummera & Ding, Xueting & Nazir, Sidra & Tariq, Salman, 2024. "Do natural resource rents, green technological innovation, and renewable energy matter for ecological sustainability? Role of green policies in testing the environmental kuznets curve hypothesis," Resources Policy, Elsevier, vol. 91(C).
    3. Josef Gotvald, 2024. "The role of environmental taxes and other political instruments on the road to climate neutrality [Role environmentálních daní a dalších politických nástrojů na cestě za klimatickou neutralitou]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2024(1), pages 47-76.
    4. Pei Wang & Cong Dong & Nan Chen & Ming Qi & Shucheng Yang & Amuji Bridget Nnenna & Wenxin Li, 2021. "Environmental Regulation, Government Subsidies, and Green Technology Innovation—A Provincial Panel Data Analysis from China," IJERPH, MDPI, vol. 18(22), pages 1-19, November.
    5. Yumihito Otsubo & Andrew J. Chapman, 2023. "Assessing Corporate Vendor Selection in the Oil and Gas Industry: A Review of Green Strategies and Carbon Reduction Options," Sustainability, MDPI, vol. 15(23), pages 1-18, November.
    6. Giuliana Birindelli & Helen Chiappini, 2021. "Climate change policies: Good news or bad news for firms in the European Union?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 831-848, March.
    7. Manta, Alina Georgiana & Doran, Nicoleta Mihaela & Bădîrcea, Roxana Maria & Badareu, Gabriela & Țăran, Alexandra Mădălina, 2023. "Does the implementation of a Pigouvian tax be considered an effective approach to address climate change mitigation?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1719-1731.

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