The Impacts of Environmental Regulations on Competitive Advantage
Anneke Zwart, Student (University), Netherlands, Moderator
The study of environmental regulations and its impact on competitive advantage has in the past literature led to inconclusive results. There are two main views that contradict each other:
1. The Traditional View. This view believes in a negative relationship between environmental regulations and innovations and indirectly on competitive advantage. This conventional view makes a trade-off between private costs and social benefits.
Examples of the social benefits of tighter environmental policies include:
- Decreases of morbidity and mortality rates as a result of cleaner air
- Improved ecosystems as a result of agricultural pesticide reductions.
The private costs that arise as a result of stringent regulations were believed to offset the social benefits that arise from those tighter standards. The idea behind those high private costs according to Porter (1995) is "the assumption that both product ...