The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?
21 Pages Posted: 26 Sep 2010
There are 2 versions of this paper
The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?
Date Written: September 24, 2010
Abstract
Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward.
Keywords: Porter Hypothesis, environmental policy, innovation, performance
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
The Induced Innovation Hypothesis and Energy-Saving Technological Change
By Richard G. Newell, Adam B. Jaffe, ...
-
The Induced Innovation Hypothesis and Energy-Saving Technological Change
By Richard G. Newell, Adam B. Jaffe, ...
-
Energy, the Environment, and Technological Change
By David Popp, Richard G. Newell, ...
-
Environmental Regulation and Innovation: A Panel Data Study
By Adam B. Jaffe and Karen L. Palmer
-
Environmental Policy and Technological Change
By Robert N. Stavins, Adam B. Jaffe, ...
-
Technological Change and the Environment
By Adam B. Jaffe, Richard G. Newell, ...
-
Technological Change and the Environment
By Adam B. Jaffe, Richard G. Newell, ...
-
The Diffusion of New Technologies: Evidence from the Electric Utility Industry
By Nancy L. Rose and Paul L. Joskow
-
Policy-Induced Technology Adoption: Evidence from the Us Lead Phasedown
By Suzi Kerr and Richard G. Newell