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Taxing Variable Cost: Environmental Regulation as Industrial Policy
Open accessAbstract
Conventional wisdom has it that a country that enacts strict environmental regulations will place its firms at a competitive disadvantage. This view has been challenged recently. Some commentators argue that stricter regulation will enhance domestic competitiveness: strict regulations induce innovation. We evaluate this argument in a strategic trade model. In very special cases a strengthening of regulation may result in a shift of profits from foreign to domestic firms. This is not a general result, however. Environmental regulation should, of course, be imposed to control externalities, but it is unlikely that it will serve to generate industrial advantage.
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Citations
Cited by
Toward a New Conception of the Environment-Competitiveness Relationship
Porter, M. E., & Linde, C. V. D. (1995) · Journal of Economic Perspectives · doi:10.1257/jep.9.4.97 · Cited by 13,365
The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?
Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013) · Review of Environmental Economics and Policy · doi:10.1093/reep/res016 · Cited by 1,928
Does It Pay to Be Green? A Systematic Overview
Stefan, A., & Paul, L. (2008) · Academy of Management Perspectives · doi:10.5465/amp.2008.35590353 · Cited by 1,759
Environmental regulation and the productivity of Japanese manufacturing industries
Hamamoto, M. (2006) · Resource and Energy Economics · doi:10.1016/j.reseneeco.2005.11.001 · Cited by 549
Wagner, M., Van Phu, N., Azomahou, T., & Wehrmeyer, W. (2002) · Corporate Social Responsibility and Environmental Management · doi:10.1002/csr.22 · Cited by 473
Metadata
- Authors
- Simpson, R. D., & Bradford, III
- Venue
- Journal of Environmental Economics and Management
- Publisher
- Elsevier BV
- Published
- 1996-05
- Volume
- 30
- Issue
- 3
- Pages
- 282-300
- ISSN
- 0095-0696 (ISSN-L)
- OpenAlex
- W2015213874
- Cited by
- 224
- References
- 0
- FWCI
- 10.07
- Type
- journal article
- Language
- en
- Open access
- hybrid
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