The Effect of Clean Water Regulation on Profitability: Testing the Porter Hypothesis
通过面板数据分析，检验了更严格的水污染排放限制对化学制造业上市公司盈利能力的影响，发现收紧水法规显著降低了企业利润，主要原因是成本上升。
Previous theoretical research provides opposing arguments regarding the effect of environmental regulation on profitability. This study provides empirical evidence on this debated effect by testing the “strong” version of the Porter hypothesis. We employ panel data analysis to examine the effect of water regulation, as measured by permitted wastewater discharge limits, on the profitability of publicly held firms operating within the chemical manufacturing industries. We find that tighter water regulation meaningfully lowers profitability. By reinterpreting profitability in terms of sales and costs, the results demonstrate that tighter water regulation increases costs conditioned on a given level of sales. <i></i>