The Environmental Porter Hypothesis: Theory, Evidence and a Model of Timing of Adoption

Kriechel, Ben and Ziesemer, Thomas (2007). The Environmental Porter Hypothesis: Theory, Evidence and a Model of Timing of Adoption. UNU-MERIT.

Document type:
Report

Metadata
Documents
Versions
Statistics
  • Attached Files (Some files may be inaccessible until you login with your UNU Collections credentials)
    Name Description MIMEType Size Downloads
    wp2007-024.pdf PDF application/pdf 499.07KB
  • Author Kriechel, Ben
    Ziesemer, Thomas
    Title The Environmental Porter Hypothesis: Theory, Evidence and a Model of Timing of Adoption
    Publication Date 2007
    Publisher UNU-MERIT
    Abstract The Porter Hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We show that times of adoption are earlier the higher the non-adoption tax. The environmental tax turns the preemption game with low profits into a game with credible precommitment yielding high profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax leads to lower profits (anti-Porter). An evaluation of the empirical literature indicates that the Porter hypothesis holds even for profit-maximizing firms under multiple market imperfections such as imperfect competititon, X-inefficiency, and agency costs. These are more likely to be present in sectors with large firms. In many case studies that we evaluate, though, we detect an element of explicit or implicit subsidies for environmentally friendly behaviour, which is in line with Pigovian policies.
    Keyword Environmental policy
    Strategic trade theory
    Technology adoption
    Porter hypothesis
    JEL Q2
    F1
    H7
    O3
    Copyright Holder UNU-MERIT
    Copyright Year 2007
    ISSN 1871-9872
  • Versions
    Version Filter Type
  • Citation counts
    Google Scholar Search Google Scholar
    Access Statistics: 685 Abstract Views, 364 File Downloads  -  Detailed Statistics
    Created: Wed, 11 Dec 2013, 15:47:45 JST