Environmental Costs and Competitiveness. A Product-Specific Test of the Porter Hypothesis

University of Ghent, Nr.98/50

21 Pages Posted: 9 Nov 1998

Date Written: May 1998

Abstract

Empirical surveys find no significant impact of environmental regulation and environmental costs on international competitiveness. We show that this is a logical consequence of the principle of comparative advantage. Other explanations can be that developed countries have very diversified exports and that most surveys do not link regulation to specific products. The Porter hypothesis states that environmental regulation can lead to improved competitiveness. Many authors only find 'anecdotal' evidence for this hypothesis but we show that when regulation is linked to specific products -- we analysed CFC-using industries -- there is clear evidence for the Porter hypothesis.

JEL Classification: F14, F21, L52, O32, Q28

Suggested Citation

Albrecht, Johan A. E., Environmental Costs and Competitiveness. A Product-Specific Test of the Porter Hypothesis (May 1998). University of Ghent, Nr.98/50, Available at SSRN: https://ssrn.com/abstract=137953 or http://dx.doi.org/10.2139/ssrn.137953

Johan A. E. Albrecht (Contact Author)

University of Ghent-CEEM ( email )

Hoveniersberg 24
Center for Environmental Economics and Environment
9000 Ghent
Belgium
+32 9 264 35 10 (Phone)
+32 9 264 35 99 (Fax)

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