• Title/Summary/Keyword: Porter's Hypothesis

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The Impact of Environmental Regulation on Korea and Japan's Exports of Renewable Energy and Energy Saving Industry (환경규제가 재생에너지 및 에너지절감산업의 수출에 미치는 영향 : 한국과 일본의 비교연구)

  • Shim, Kieun;Jeong, Kyounghwa
    • Environmental and Resource Economics Review
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    • v.18 no.1
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    • pp.75-103
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    • 2009
  • The hypothesis suggested by Porter and van der Linde claims that innovating firms operate in a dynamic competitive situation which allows global diffusion of environmental-friendly technologies. Therefore, countries that are subjects to more stringent environmental regulations may become net exporters of environmental technologies. In the context of Porter hypothesis, this study investigates the impact of importing countries' environmental regulation on Korea and Japan's export flows of technologies for renewable energies and energy efficiency by estimating the gravity equation. The estimation result shows that : (1) our results are consistent with the Porter hypothesis where environmental regulation represents a significant source of comparative advantages, (2) Korea's export flows of technologies for renewable energies and energy efficiency with respect to the importing countries' environmental regulation are more sensitive than Japan's, and (3) the adverse relationship between export flows and importers' environmental stringency in developing countries does not hold in the renewable energies and energy efficiency related sector.

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A Study on the Relationship between Environment Technology and Labor Demand (환경기술과 노동수요)

  • Hwang, Seok-Joon
    • Environmental and Resource Economics Review
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    • v.22 no.2
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    • pp.309-328
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    • 2013
  • In this research, we try to find the conditions under which profit maximizing labor demand increases with pollution abatement activities under the environmental protection policy. Especially, we focus only on the technological advances in traditional production process caused by the spillover effect of pollution abatement technology. Even if Porter's hypothesis(1995) are given, we argue that it is not enough for the society to enjoy the benefits from the innovation with the strengthen of firms' competitiveness. To spread the benefits over economic agents in a society, especially including labor-owner, the current level of pollution abatement technology is important. When the level of pollution abatement technology is appropriate, both the environment protection and the job creation can be achieved through the government policy for environment protection.

Environmental Regulations and Korean Trades (환경규제와 한국의 무역)

  • Kim, Il Chung;Choi, Mun Seong
    • Environmental and Resource Economics Review
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    • v.22 no.4
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    • pp.785-815
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    • 2013
  • This paper analyzes the three issues related to the effect of environmental regulations on the Korean trades with gravity equation model: the effect on the Korean exports, the bilateral trade flows between the Korea and the trade partners, and the Korean international competitiveness. For all three issues we carried the empirical tests with fixed effect estimation methods for total industries, non-pollution industries, pollution industries, and also 16 individual pollution industries. We use industry panel data for the 120 largest trading countries with Korea for the years 2000-2010. The Environmental Performance Index (EPI) is used as the proxy variable for the environmental regulation. The empirical result shows that while GDPs of both Korea and its trading partners are very important factors affecting positively the Korean trades for all industries, the environmental regulation of the importing country would be a definite trade barrier to the Korean pollution industries, but not a definite one for the non-pollution industries. In addition, the stricter environmental regulations of Korea's trade partners would weaken the Korean international competitiveness of Korean pollution industries. In this regard, the Porter Hypothesis would have not appeared in the Korean trades of pollution industries during the period observed in this study.

The Linkage of Foreign Direct Investment, Economic Growth, and Environmental Regulations : Scale Effect and Technique Effect (외국인직접투자, 경제성장, 환경규제의 관계분석 : 규모효과와 기술효과를 중심으로)

  • Kim, KwangUk;Kang, SangMok
    • Environmental and Resource Economics Review
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    • v.18 no.3
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    • pp.523-544
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    • 2009
  • The purpose of this paper is to estimate the impact of foreign direct investment on environmental performance for 27 OECD countries using endogenous environmental policy model. The empirical test shows that with 1% increase in the ratio of inflow stock of foreign direct investment over domestic capital stock, emission on NOx and $CO_2$ will increase by 0.0071%(NOx) and 0.0165%($CO_2$) and 1% increase in the ratio of foreign capital stock induces 0.044%(fixed effect) and 0.047%(random effect) of economic growth. 1% increase of per labor total output increases 2.038%(fixed effect) or 1.890%(random effect) in reinforcement of environmental regulation. However, we could not confirm the Porter's hypothesis that the more strong environmental regulation leads technical innovation. The scale effects (0.0119, 0.0172) are estimated higher than the technical effects (-0.0048, -0.0007) in two pollutants (NOx, $CO_2$). It implies that each country needs to increase pollution abatement and control expenditure more aggressively to protect environment.

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Long Memory and Market Efficiency in Korean Futures Markets (국내 선물시장의 장기기억과 시장의 효율성에 관한 연구)

  • Cho, Dae-Hyoung
    • Asia-Pacific Journal of Business
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    • v.11 no.4
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    • pp.255-269
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    • 2020
  • Purpose - This paper analyzes the market efficiency focusing on the long memory properties of the domestic futures market. By decomposing futures prices into yield and volatility and looking at the long memory properties of the time series, this study aims to understand the futures market pricing and change behavior and risks, specifically and in detail. Design/methodology/approach - This study analyzes KOSPI 200 futures, KOSDAQ 150 futures, 3 and 10-year government bond futures, US dollar futures, yen futures, and euro futures, which are among the most actively traded on the Korea Exchange. To analyze the long memory and market efficiency, we used the Variance Ratio, Rescaled-Range(R/S), Geweke and Porter-Hudak(GPH) tests as semi- parametric methods, and ARFIMA-FIGARCH model as the parametric method. Findings - It was found that all seven futures supported the efficiency market hypothesis because the property of long memory turned out not to exist in their yield curves. On the other hand, in futures volatility, all 7 futures showed long memory properties in the analysis, which means that if new information is generated in the domestic futures market and the market volatility once expanded due to the impact, it does not decrease or shrink for a long period of time, but continues to affect the volatility. Research implications or Originality - The results of this paper suggest that it can be useful information for predicting changes and risks of volatility in the domestic futures market. In particular, it was found that the long memory properties would be further strengthened in the currency futures and bond rate futures markets after the global financial crisis if the regime changes of the domestic financial market are taken into account in the analysis.

Random Walk Test on Hedge Ratios for Stock and Futures (헤지비율의 시계열 안정성 연구)

  • Seol, Byungmoon
    • Asia-Pacific Journal of Business Venturing and Entrepreneurship
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    • v.9 no.2
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    • pp.15-21
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    • 2014
  • The long memory properties of the hedge ratio for stock and futures have not been systematically investigated by the extant literature. To investigate hedge ratio' long memory, this paper employs a data set including KOSPI200 and S&P500. Coakley, Dollery, and Kellard(2008) employ a data set including a stock index and commodities foreign exchange, and suggested the S&P500 to be a fractionally integrated process. This paper firstly estimates hedge ratios with two dynamic models, BEKK(Bollerslev, Engle, Kroner, and Kraft) and diagonal-BEKK, and tests the long memory of hedge ratios with Geweke and Porter-Hudak(1983)(henceforth GPH) and Lo's modified rescaled adjusted range test by Lo(1991). In empirical results, two hedge ratios based on KOSPI200 and S&P500 show considerably significant long memory behaviours. Thus, such results show the hedge ratios to be stationary and strongly reject the random walk hypothesis on hedge ratios, which violates the efficient market hypothesis.

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Environmental Regulation, Firm Heterogeneity and Innovation (환경규제, 기업 이질성, 그리고 기업의 혁신 활동에 대한 행태적 접근)

  • Park, Minje;Jin, Byungchae
    • Journal of Technology Innovation
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    • v.30 no.1
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    • pp.21-56
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    • 2022
  • Since Michael Porter (1991) has proposed that environmental regulation can help a firm increase its competitiveness by encouraging it to engage in more innovative activities to meet the environmental regulation, a number of researchers have empirically investigated the "Porter Hypothesis." However, the empirical results still remain mixed. Combining the perspectives of the behavioral theory of the firm and firm heterogeneity, we argue that the levels of regulation stringency and time-pressure would differentially influence a firm's innovative behavior depending on the firm's aspiration level, performance feedback and technological capabilities. Using the U.S. Corporate Average Fuel Efficiency (CAFE) regulation context, we empirically demonstrate that lagging firms that do not meet the new regulation standard announced by the government tend to search for more distant knowledge and that the impact of the patents they file for decreases as the regulation becomes more stringent. In addition, we also find that as time-pressure increases, lagging firms stand to apply for more patents than do leading firms whereas the overall impact of the patents decreases. These results help us advance our understanding of the nuanced causal relationship between regulation and innovation and provide practical implications for policymakers.

A Study on CSV of Social Economy and Consumer Perspective (사회적경제와 소비자 관점의 공유가치창출(CSV) 연구)

  • Lee, Young-Il;Kim, Young-Shin
    • Journal of Distribution Science
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    • v.13 no.12
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    • pp.53-63
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    • 2015
  • Purpose - Recently, creating shared value (CSV) has attracted attention through plan sustainability and the growth of corporate management. Porter and Kramer (2011) defined the core concept of CSV as social value, economic profits, improvements in the economic social condition, and reinforcing competitiveness. The purpose of CSV, which is to pursue economic profits through a social solution to the problem, agrees with managing the objective of a social enterprise that prioritizes the pursuit of profits through the realization of a social purpose. Today, CSV studies focus on CSR and sustainability and reinforce competitiveness. However, few studies focused on the social economy. Precedent studies examined CSV using a company example, and few studies exist from the perspective of consumers and the point of view of a market society. Research design, data, and methodology - Therefore, this study examines CSV in comparison to a background of the social economy. This study also investigates and analyzes the concept of social value from the point of view of consumers, social problems, consumption value, corporate value, and the influence of consumers. This article develops three hypotheses. Hypothesis 1 investigates the correlation with social innovation that consumers thought as being necessary for social innovation by a company. Hypothesis 2 is used to confirm the influence of consumers in CSV. Therefore, this article investigates the influence of consumers on consumption action for companies that are indifferent to social problems. Hypothesis 3 is used to verify the correlation between the value that consumers demand through consumption and the corporate value that companies pursue other than profits. The three hypotheses were adopted and met the standard for suitability. Results - The importance of the CSV study from the consumer perspective was confirmed using the influence of consumers on CSV. Because the objective of company activities is either the consumer or the market, the influence that extends to interactions between the company and consumers to ensure the success of a business is significant. Regarding the CSV study, because it was an initial study, various approaches are subsequently developed. However, conceptual and practical case studies on CSV currently exist that may be used to verify the factors that comprise CSV. Therefore, the company example may enable verification of the factors that influence the composition of CSV through identification from the consumer perspective. In addition, studying CSV as an action result (of consumer satisfaction, of a company's profits and competitiveness, and of society's cancellation of a social problem) may enable the realization of a practice paradigm as opposed to simply thought and faith. Conclusions - First, this study confirms the social value of a business through the feasible and common pursuit of consumers by corporations. Second, customer influence accounts for an important part of CSV. Third, shared value commonly provides a necessary advantage to consumers, corporates, and society, and contributes to the economy and healthy social development. Fourth, corporates can conduct a business, generate profits, and realize value through improvements in social problems and by addressing their competitive strengths and weaknesses.

A Study on the Influence of Social Regulation on Competition and Innovation: A Case of Fire-retardant Coating Material for Steel Structure Sector in Korea (사회적 규제가 대체재 간 경쟁과 혁신에 미치는 영향에 관한 연구 : 국내 철강 구조물용 내화 피복재 산업의 사례연구)

  • Chang, Chul Kwon;Ji, Ilyong
    • Journal of Korea Technology Innovation Society
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    • v.20 no.4
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    • pp.939-969
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    • 2017
  • The interest in social regulation and its influence on innovation are increasing as the society concerns more for environment and safety. There have been plenty of literature about the impact of social regulation on innovation and its mechanism. Majority of research have been influenced by or based on the famous Porter's hypothesis. However, majority of the literature focus on internal factors such as expected benefits from change of regulations, and it is hard to find one studying social regulation's influence on innovation through external factors such as market or industrial structure. This study addresses this issue of the impact of social regulation on innovation by analyzing the case of fire-retardant coating material for steel structure industry in Korea. It scrutinizes the impact of social regulation which affects competition and innovation on substitute competing market, and tries to reveal that there might exist the other path to innovation, besides the way that the expected benefit from compliance of regulation directly drives innovation. As a result of the case study, we have found that changes in social regulation may act like economic regulation and restructure the market segment and this effect may lead to innovation. It can be explained by the fact that expected benefits from compliance of regulation can be a direct source of innovation, as Porter suggested, but the change of industry structure and competitive strength caused by the change in social regulation can also act as a driving force of innovation.