The Effect of Clean Water Regulation on Profitability: Testing the Porter Hypothesis

Rassier, Dylan G.; Earnhart, Dietrich

doi:10.3368/le.86.2.329

Cited by 62 publications

(22 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Testing the validity of the 'Porter hypothesis' is an active area of research (e.g. Rennings and Rammer, 2011;Rassier and Earnhart, 2010;Ramanathan et al, 2010).…”

Section: Direct 'Command and Control' Regulationmentioning

confidence: 99%

Selecting Policy Instruments for Better Environmental Regulation: a Critique and Future Research Agenda

et al. 2012

View full text Add to dashboard Cite

There is a lack of evidence on regulatory effectiveness available to support policy makers with the selection of appropriate instruments to deliver better environmental regulation. We identify the types of evidence required to enable regulatory reform, characterize evidence gaps, and explore how these may be filled through future research. A typology of regulatory instruments is presented, and evidence of what has worked when and why is examined, drawing on international experience and recent cases from the United Kingdom (UK). Evidence of the capabilities of good environmental regulators for regulatory effectiveness is lacking, and it is proposed that ethnographic research that captures the nuances of regulatory practice will prove necessary to address this. This paper is of value to policy makers and regulators around the world considering the selection and deployment of the full range of environmental regulatory instruments to respond to environmental risks and in support of economic growth. It can inform the selection of suitable approaches and the design of institutions capable of delivering them. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.

show abstract

“…Testing the validity of the 'Porter hypothesis' is an active area of research (e.g. Rennings and Rammer, 2011;Rassier and Earnhart, 2010;Ramanathan et al, 2010).…”

Section: Direct 'Command and Control' Regulationmentioning

confidence: 99%

Selecting Policy Instruments for Better Environmental Regulation: a Critique and Future Research Agenda

et al. 2012

View full text Add to dashboard Cite

show abstract

“…, in a study of 4200 facilities in seven OECD countries, find evidence that environmental regulation induces innovation and that the costs of complying with this regulation are partially offset by this new innovation. Rassier and Earnhart (2010), on the other hand, find that tighter water regulation increases costs and hence reduces the profitability of publicly held firms operating within the chemical manufacturing industries. Similarly Brännlund and Lundgren (2010) find evidence that the CO 2 tax in Sweden reduces the profitability of most firms, especially those in energy-intensive industries.…”

Section: Eco-innovation and Firm Performancementioning

confidence: 99%

Regulation and firm perception, eco‐innovation and firm performance

Doran

Ryan

2012

European Journal of Innovation Management

274

224

View full text Add to dashboard Cite

Purpose -Recent OECD (2010, 2011) reports argue that eco-innovation is the key to realising growth. The purpose of this paper is to analyse the drivers of eco-innovation and to compare the impact of eco-innovation and non-eco-innovation on firm performance. The paper provides insights into the role government regulation can play in directing and stimulating eco-innovation. Design/methodology/approach -The approach utilised by this paper is empirical in nature. A modified innovation production function is used to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of eco-innovation while a knowledge augmented production function is used to assess the impact of eco-innovation on firm performance. Findings -The findings suggest that regulation and customer perception can explain a firm"s decision to engage in eco-innovation. Eco-innovation is also found to be more important than non-eco-innovation in determining firm performance. Research limitations/implications -Due to the limited availability of accounting data this paper uses turnover per worker as the measure of firm performance. As a result it is not possible to assess the impact of eco-innovation on firm costs. Social implications -The finding that regulation drives eco-innovation and that there is no trade-off between the optimal outcomes of lower levels of pollution for society and higher profit margins for businesses suggests that regulators and policy makers can stimulate growth and create a greener society. Originality/value -This paper provides an empirical analysis of the Porter and van der Linde"s (1995) theory of environmental regulation and firm performance using novel real world data from over 2,000 Irish businesses.

show abstract

“…In a series of studies, Rassier and Earnhart (2010a;2010b;2015) analyse the extent to which firm-specific limitations on emissions have heterogeneous effects on firms' actual profitability and investors' expectations on firms' future profitability. 7 Across all studies, they examine the effects of facility-specific wastewater discharge limits regulated by the US EPA.…”

Section: (C) Profitability and Investors' Valuationmentioning

confidence: 99%

Do Environmental and Economic Performance Go Together? A Review of Micro-level Empirical Evidence from the Past Decade or So

Dechezleprêtre

Koźluk

Kruse

et al. 2019

IRERE

View full text Add to dashboard Cite

This article reviews the empirical literature combining economic and environmental performance data at the micro-level, i.e. firm-or facility-level. The literature has generally found a positive and statistically significant correlation between economic performance, as measured by profitability indicators or stock market returns, and environmental performance, as measured by emissions of pollutants or adoption of international environmental standards. The main reason for this finding seems to be that firms that reduce their material and energy costs experience both better economic performance and lower emissions. Only a small and recent literature analyses the joint causal impact of environmental regulations on environmental and economic performance. Interestingly, this literature shows that environmental regulations tend to improve environmental performance while not weakening economic performance. However, the evidence so far is limited to a handful of environmental regulations that are not extremely stringent, so the result cannot be easily generalized. More research is needed to assess the joint effects of environmental regulations on environmental and economic performance, to explore the heterogeneity of these effects across sectors, countries and types of policies, and to understand which policy designs allow improving environmental quality while not coming at a cost in terms of economic performance of regulated businesses.

show abstract

The Effect of Clean Water Regulation on Profitability: Testing the Porter Hypothesis

Cited by 62 publications

References 32 publications

Selecting Policy Instruments for Better Environmental Regulation: a Critique and Future Research Agenda

Selecting Policy Instruments for Better Environmental Regulation: a Critique and Future Research Agenda

Regulation and firm perception, eco‐innovation and firm performance

Do Environmental and Economic Performance Go Together? A Review of Micro-level Empirical Evidence from the Past Decade or So

Contact Info

Product

Resources

About