College
Buchtel College of Arts and Sciences (BCAS)
Date of Last Revision
2023-05-04 00:08:21
Major
Economics
Honors Course
3250:497
Number of Credits
3
Degree Name
Bachelor of Arts
Date of Expected Graduation
Spring 2020
Abstract
This paper examines whether there is evidence to support or refute the Porter Hypothesis on a high polluting industry through analyzing the effect of environmental stringency on innovation in the chemical industry. Taking data from the Organization for Economic Cooperation and Development (OECD), we use country-level data from 2003-2015, to analyze how a country’s number of Class C chemical patents is affected by their Environmental Policy Stringency (EPS) Index. Using a fixed effect model, we controlled for differences in GDP, exports, investment in research and development, market competitiveness and participation in the industry. The initial results of this regression found that as a country’s EPS Index changes by one unit, we would expect a decrease in about 45 patents in a year at the 99 percent significance level. These findings support our hypothesis that there is evidence against the strong form of the Porter Hypothesis.
This suggests policies aimed at reaching environmental goals may need to create flexibility to stimulate innovation. This could be through creating more opportunities for innovation through government funded grants or creating incentives for private investment in research and development. However, this research could be enhanced by more country observations and industry level data.
Research Sponsor
Dr. Francesco Renna
First Reader
Dr. Sucharita Ghosh
Second Reader
Dr. Elizabeth Erickson
Honors Faculty Advisor
Dr. Elizabeth Erickson
Recommended Citation
Woyat, Maci, "A Cross-Country Empirical Analysis of the Porter Hypothesis in the Chemical Industry" (2020). Williams Honors College, Honors Research Projects. 1168.
https://ideaexchange.uakron.edu/honors_research_projects/1168
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