Are more innovative firms less vulnerable to new environmental regulation?

Compliance with pollution limits and standards requires firms to implement adaptation processes that are not only costly themselves but also affect future profits in as much as they modify production systems and methods. This paper attempts to respond to the question of how technological knowledge moderates the effect that the implementation of a new environmental regulation has on the results of affected firms. The regulation selected for this study is the Integrated Pollution Prevention and Control Act (IPPC). A Multivariate Regression Model (MVRM) has been applied to the regulatory event. The most important implication of this paper is that technological knowledge prepares a firm for adapting to a greater environmental demand such as may be derived from a new regulation.

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Keywords:

Environmental regulation, Market value, Technological knowledge

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Language(s):English
AuthorsCañón-De-Francia, Joaquín (Dept of Economics and Business Management, University of Zaragoza, Spain), Garcés-Ayerbe, Concepción (Dept of Economics and Business Management, University of Zaragoza, Spain), Ramírez-Alesón, Marisa (Dept of Economics and Business Management, University of Zaragoza, Spain)
Publisher:Springer
Keywords:Environmental regulation, Market value, Technological knowledge
Last update:2006