TEL  Vol.3 No.6 , December 2013
Environmental Regulation, Technology Innovation, and Profit: A Perspective of Production Cost Function
Author(s) Ming-Chung Chang*
ABSTRACT

The Porter hypothesis asserts that a stricter environmental regulation stimulates firms to conduct innovation and increase their profit. This paper uses a theoretical framework to examine the Porter hypothesis. We conclude that although a stricter environmental regulation can increase profit, it does not stimulate innovation in a firm.

 


Cite this paper
M. Chang, "Environmental Regulation, Technology Innovation, and Profit: A Perspective of Production Cost Function," Theoretical Economics Letters, Vol. 3 No. 6, 2013, pp. 297-301. doi: 10.4236/tel.2013.36050.
References
[1]   M. E. Poter and C. van der Linde, “Toward a New Conception of the Environment Competitiveness Relationship,” Journal of Economic Perspectives, Vol. 9, No. 4, 1995, pp. 97-118.
http://dx.doi.org/10.1257/jep.9.4.97

[2]   S. Ambec and P. Barla, “A Theoretical Foundation of the Porter Hypothesis,” Economics Letters, Vol. 75, 2002, pp. 355-360. http://dx.doi.org/10.1016/S0165-1765(02)00005-8

[3]   M. Greaker, “Spillovers in the Development of New Pollution Abatement Technology: A New Look at the Porter Hypothesis,” Journal of Environmental Economics and Management, Vol. 52, No. 1, 2006, pp. 411-420.
http://dx.doi.org/10.1016/j.jeem.2006.01.001

[4]   R. Hart, “Growth, Environment and Innovation—A Model with Production Vintages and Environmentally Oriented Research,” Journal of Environmental Economics and Management, Vol. 48, No. 3, 2004, pp. 1078-1098.
http://dx.doi.org/10.1016/j.jeem.2004.02.001

[5]   R. D. Mohr, “Technical Change, External Economies, and the Porter Hypothesis,” Journal of Environmental Economics and Management, Vol. 43, No. 1, 2002, pp. 158-168.
http://dx.doi.org/10.1006/jeem.2000.1166

[6]   K. Palmer, W. E. Oates and P. R. Portney, “Tightening Environmental Standards: The Benefit Cost or the NoCost Paradigm?” Journal of Economic Perspectives, Vol. 9, 1995, pp. 119-132.
http://dx.doi.org/10.1257/jep.9.4.119

[7]   F. Cairncross, “Costing the Earth,” Harvard University Press, Cambridge, 1992.

[8]   T. N. Cason and L. Gangadharan, “Environmental Labelling and Incomplete Consumer Information in Laboratory Experiments,” Journal of Environmental Economics and Management, Vol. 43, 2002, pp. 113-134.
http://dx.doi.org/10.1006/jeem.2000.1170

 
 
Top