Do environmental and economic performance go together? A review of micro-level empirical evidence from the past decade or so

Antoine Dechezleprêtre, Tomasz Kozluk, Tobias Kruse, Daniel Nachtigall and Alain de Serres ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This article reviews the empirical literature combining economic and environmental performance data at the micro-level, i.e. firm or facility level. The literature has generally found a positive and statistically significant correlation between economic performance, as measured by profitability indicators or stock market returns, and environmental performance, as measured by emissions of pollutants or adoption of international environmental standards. The main reason for this finding seems to be that firms that reduce their material and energy costs experience both better economic performance and lower emissions. Only a small and recent literature analyses the joint causal impact of environmental regulations on environmental and economic performance. Interestingly, this literature shows that environmental regulations tend to improve environmental performance while not weakening economic performance. However, the evidence so far is limited to a handful of environmental regulations that are not extremely stringent, so the result cannot be easily generalized. More research is needed to assess the joint effects of environmental regulations on environmental and economic performance, to explore the heterogeneity of these effects across sectors, countries and types of policies, and to understand which policy designs allow improving environmental quality while not coming at a cost in terms of economic performance of regulated businesses.

Keywords: Environmental performance; Environmental regulation; Financial performance; Porter hypothesis; Research synthesis (search for similar items in EconPapers)
JEL-codes: O32 Q52 Q55 Q58 (search for similar items in EconPapers)
Pages: 118 pages
Date: 2019-04-26
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env and nep-gen
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in International Review of Environmental and Resource Economics, 26, April, 2019, 13(1-2), pp. 1-118. ISSN: 1932-1465

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http://eprints.lse.ac.uk/100900/ Open access version. (application/pdf)

Related works:
Journal Article: Do Environmental and Economic Performance Go Together? A Review of Micro-level Empirical Evidence from the Past Decade or So (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100900

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