Environmental Regulations Effects on Competitiveness

Abstract

This article examines how environmental constraints affect corporate competitiveness as measured by export, product geography, workforce, productivity, and innovation. The research shows that environmental rules can have statically meaningful short-term negative impacts on sales, labor, plant location, and productivity, particularly in a well-defined group of pollution- and emission industries, but that these effects are negligible in comparison to overall output trends. While there is indications that environmental rules spur the development of clean technologies, the advantages do not seem to exceed the costs of regulation for the regulated parties. Future studies will be required to evaluate the reliability and efficiency of such measurements, and also to confirm their compatibility with the as methods to address the effects of competition are increasingly included into the creation of regulatory requirements, environmentally objectives of the regulations are becoming more and more important. The research demonstrates that environmental laws can have statistically serious negative effects effect trade, employment, plant locations, and effectiveness in the short run, particularly in a well- identified group of industries that use a lot of energy and pollutants, but that these impacts are negligible in comparison to overall output patterns. However, the advantages that arise from this innovation in clean technology do not seem to be substantial enough to justify the costs of regulation for the regulated firms. Environmental restrictions have been shown to stimulate innovation in this area. Future study will be necessary to evaluate the validity and efficacy of such measures and to guarantee that they are acceptable with the environmental protection of the policies as measures to fix competitively impacts are increasingly included into the drafting of environmental laws.