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Environmental Regulation and Productivity: New Findings on the Porter Analysis

Author

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  • Richard Lajeunesse
  • Paul Lanoie
  • Michel Patry

Abstract

This paper provides an empirical analysis of the relationship between the stringency of environmental regulation and total factor productivity (TFP) growth in the Quebec manufacturing sector. This allows us to investigate more fully the Porter hypothesis in three directions. First, the dynamic aspect of the hypothesis is captured through the use of lagged regulation variables. Second, we argue that the hypothesis is more relevant for more polluting sectors. Third, we argue that the hypothesis is more relevant for sectors which are more exposed to international competition. Our empirical results suggest that: 1) the contemporaneous impact of environmental regulation on productivity is negative, 2) the opposite result is observed with lagged regulation variables and 3) this effect is stronger in a sub-group of industries which are more exposed to international competition. Ce texte présente une analyse empirique de la relation entre l'ampleur de la réglementation environnementale et la productivité totale des facteurs en utilisant des données du secteur manufacturier québécois. Cet exercice nous permet de pousser l'analyse de l'hypothèse porterienne dans trois directions. Premièrement, l'introduction de variables réglementaires retardées nous permet de mieux capter l'aspect dynamique de l'hypothèse. Deuxièmement, nous postulons que l'hypothèse de Porter a plus de chance d'être valide dans les secteurs très polluants. Troisièmement, nous postulons qu'il sera de même dans les secteurs plus exposés à la concurrence extérieure. Nos résultats empiriques suggèrent que: 1) l'impact de la variable contemporaine de réglementation est négatif; 2) le résultat contraire est observé pour les variables de réglementation retardées et 3) cet effet est plus fort dans les secteurs les plus exposés à la concurrence extérieure.

Suggested Citation

  • Richard Lajeunesse & Paul Lanoie & Michel Patry, 2001. "Environmental Regulation and Productivity: New Findings on the Porter Analysis," CIRANO Working Papers 2001s-53, CIRANO.
  • Handle: RePEc:cir:cirwor:2001s-53
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    File URL: https://cirano.qc.ca/files/publications/2001s-53.pdf
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    References listed on IDEAS

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    1. Christoffersen, Peter & Ghysels, Eric & Swanson, Norman R., 2002. "Let's get "real" about using economic data," Journal of Empirical Finance, Elsevier, vol. 9(3), pages 343-360, August.
    2. John M. Maheu & Thomas H. McCurdy, 2002. "Nonlinear Features of Realized FX Volatility," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 668-681, November.
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    Cited by:

    1. Haipeng Chen & Jie Zhou & Jia Liang & Dungang Zang & Martinson Ankrah Twumasi & Qianling Shen, 2023. "Study on the Impact of Air Pollution on Agricultural Export Trade," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    2. Ben Kriechel & Thomas Ziesemer, 2009. "The environmental Porter hypothesis: theory, evidence, and a model of timing of adoption," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(3), pages 267-294.
    3. Ambec, Stefan & Barla, Philippe, 2005. "Can Environmental Regulations be Good for Business? an Assessment of the Porter Hypothesis," Cahiers de recherche 0505, Université Laval - Département d'économique.
    4. Xin Nie & Zhoupeng Chen & Linfang Yang & Qiaoling Wang & Jiaxin He & Huixian Qin & Han Wang, 2022. "Impact of Carbon Trading System on Green Economic Growth in China," Land, MDPI, vol. 11(8), pages 1-16, July.
    5. Anabel Zárate-Marco & Jaime Vallés-Giménez, 2015. "Environmental tax and productivity in a decentralized context: new findings on the Porter hypothesis," European Journal of Law and Economics, Springer, vol. 40(2), pages 313-339, October.
    6. Philippe Barla & Sergio Perelman, 2005. "Sulphur emissions and productivity growth in industrialised countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(2), pages 275-300, June.

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    More about this item

    Keywords

    Porter hypothesis; environmental regulation; productivity; Hypothèse de Porter; réglementation environnementale; productivité;
    All these keywords.

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