Effects of environmental regulation on productivity: International firm-level data analysis

2021 Fiscal Year Final Research Report

• Project/Area Number: 19K01659
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Review Section: Basic Section 07040:Economic policy-related
• Research Institution: Tokai University
• Principal Investigator: Honma Satoshi 東海大学, 政治経済学部, 教授 (70368869)
• Project Period (FY): 2019-04-01 – 2022-03-31
• Keywords: 環境経済学 / ポーター仮説 / 確率フロンティア分析 / 生産性 / 技術

Outline of Final Research Achievements

This paper examines the strong version of the Porter hypothesis (PH) by using a huge international firm-level dataset, approximately 800,000 observations and the environmental policy stringency (EPS) index. To examine the impacts of the EPS on firms’ inefficiency, we use the technical inefficiency effects model of the stochastic frontier analysis. We examined the non-linear impacts of not only the total EPS index, but also the four policy instruments: standards, tax, trading schemes, and R&D subsidies. To address potential endogeneity problems, the predicted EPSs are employed in the estimation. Empirical results show that the strong PH holds for not only the total but also all individual environmental policy instruments when each of the EPS exceeds its threshold. The empirical results by policies and by industries are qualitatively almost the same. Our results support that the strong PH holds when environmental regulations are tightened beyond a certain level.

Free Research Field

環境経済学

Academic Significance and Societal Importance of the Research Achievements

研究成果の学術的・社会的意義として、第一に先行研究とは異なって膨大な国際ミクロデータを用いて環境規制が企業の生産性に与える影響を分析したことである。第二に、環境政策全体だけでなく、環境税や排出量取引といった個別の政策手段の強化が生産性に与える影響を明らかにしたことである。第三に、環境規制の強化が生産性に与える影響は非線形的で、一定水準以上の規制強化は多くの場合で正の影響を与えることを示したことである。