Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of...

Jaffe and Palmer (1997) present three distinct variants of the so-called Porter Hypothesis. The weak version of the hypothesis posits that environmental regulation will stimulate certain kinds of environmental innovations. The narrow version of the hypothesis asserts that flexible environmental...