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A Legal Consideration on Environmental Regulation and Corporate Competitiveness Strategy Focusing on the review of the Porter Hypothesis

  • Legal Theory & Practice Review
  • Abbr : LTPR
  • 2020, 8(3), pp.151-183
  • Publisher : The Korea Society for Legal Theory and Practice Inc.
  • Research Area : Social Science > Law
  • Received : July 30, 2020
  • Accepted : August 22, 2020
  • Published : August 31, 2020

choi, yong-keun 1

1호서대학교

Candidate

ABSTRACT

The question of how environmental regulation affects a company’s competitiveness is an old and new problem. The majority of traditional economists and industry have been accepted as environmental regulation becoming less competitive, and regulators have often sought compromises in the face of voices of regulatory opposition from this point of view. On the other hand, a few decades ago, the so-called Porter hypothesis was raised, and a certain understanding is being progressed even in the view that the environmental regulation will increase the production efficiency and competitiveness of the company, and it can be said that there is a consensus. In addition, strict environmental regulations at home not only result in overseas shifts in production activities (so-called pollution evasion hypothesis) or loss of employment, but rather, if environmental regulations are moderate, it is rather definite in this regard. This is not being derived. Therefore, this study conceptually summarizes the company’s response to environmental regulations, and then reviews empirical research on the Porter hypothesis and the pollution evasion hypothesis for the past 10 years. At the same time, we will present future research in this field. This paper focuses on the avoidance hypothesis and the porter hypothesis and introduces the empirical research results of economics on the effect of environmental regulations on corporate activities. In particular, Arimura et al., (2014) point out and presented an important issue that was not considered in previous studies on the Porter hypothesis about the relationship between environmental regulation and technological innovation. However, current hypothesis testing is based on an extremely simple analysis and does not take into account the effects of other factors, such as company size. Subsequent studies need to proceed with joint research, such as regression analysis that considers the effects of other factors, and to test hypotheses in more detail.

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