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EE Seminar

Environmental & Natural Resource Economics Seminar

The strong Porter hypothesis in an endogenous growth model with satisficing managers

Speaker

Dominique Bianco
Associate professor of Economics, University of Burgundy

Website

Abstract

Few endogenous growth models have focused attention on the strong Porter hypothesis that stricter environmental policies induce innovations, the benefits of which exceed the costs. A key assumption underlying this hypothesis is that policy strictness pushes firms to overcome some obstacles to profit maximization. This paper incorporates pollution and taxation in the model of Aghion and Griffith (2005) of growth which includes satisficing managers and non-drastic innovation. Our theoretical results predict the strong Porter hypothesis. However, assuming drastic innovation in the model, we predict the weak Porter hypothesis. We also consider several extensions, such as a simultaneous competition policy or a command and control policy.

Keywords : Porter hypothesis, environmental policy, endogenous growth

JEL : 04 – Economic growth and aggregate productivity : general ; Q5 – Environmental economics : general

Practical information

Location

UMR CEE-M
Montpellier SupAgro / INRA - Bat. 26 - Centre de documentation Pierre Bartoli
2 Place Viala 34000 Montpellier

Dates & time

Oct 18, 2019
11:00
18
Oct

Contact

Julie Subervie
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Gwenolé Le Velly
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