A literature review of the factors affecting the compliance costs of environmental regulation and companies’ productivity

Lah, Lenart Milan (author), Kotnik, Žiga (author)

Purpose: The aim of the paper is to identify potential factors that influence the relative size of environmental compliance costs through a literature review and propose a conceptual holistic model of the indirect impact of these factors on companies’ productivity levels. In the literature, the connection between costs associated with environmental regulation and companies’ productivity has been thoroughly tested within what is known as the Porter hypothesis, or simply PH. Design/methodology/approach: The paper applies the methods of integrative review of scientific literature and qualitative research with a document study. Findings: The results point to several key findings. First, the identified potential factors can be divided into two main categories, namely internal factors (size, sector, age, environmental awareness, etc.) and external factors (relevance of environmental regulation for businesses, environmental stimulus measures, quality of institutions, etc.). Second, the wide use of compliance costs within the indicators of stringency of environmental regulation suggests that the relative size of environmental compliance costs is likely to affect companies’ productivity. Practical Implications: The identification of factors affecting the size of compliance costs provides valuable insights to policy makers for the implementation of environmental regulation and making it more effective while not being discriminatory in terms of presenting an excessive burden to certain types of companies. Originality/significance: There has been a gap in the literature on environmental regulation compliance costs, as so far no study has comprehensively addressed all the potential factors influencing the relative size of environmental compliance costs for companies.

• Language: English
• Keywords: compliance costs, environmental regulation, productivity, Porter hypothesis, digital maturity
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: FU - Faculty of Administration
• Publication version: Version of Record
• Year: 2022
• Number of pages: Str. 57-80, 192-193
• Numbering: Vol. 20, no. 2
• PID: 20.500.12556/RUL-143431
• UDC: 35:502.2
• ISSN on article: 2591-2240
• DOI: 10.17573/cepar.2022.2.03
• COBISS.SI-ID: 132325635
• Publication date in RUL: 20.12.2022

Record is a part of a journal

• Title: Central European public administration review
• Publisher: Fakulteta za upravo
• ISSN: 2591-2240
• COBISS.SI-ID: 293849600

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Title: Pregled literature o dejavnikih, ki vplivajo na stroške izpolnjevanja obveznosti iz okoljske regulative in produktivnost podjetij

Abstract

Namen: Namen prispevka je s pomočjo pregleda literature opredeliti potencialne dejavnike, ki vplivajo na relativno višino stroškov izpolnjevanja obveznosti iz okoljske regulative, in predlagati konceptualni celostni model posrednega vpliva teh dejavnikov na produktivnost podjetij. V literaturi je bila povezava med stroški izpolnjevanja obveznosti iz okoljske regulative in produktivnostjo podjetij preverjena v okviru tako imenovane Porterjeve hipoteze. Zasnova/Metodologija/Pristop: V prispevku sta uporabljeni metodi integrativnega pregleda znanstvene literature in kvalitativne raziskave s študijo dokumentov. Ugotovitve: Rezultati ponujajo več ključnih ugotovitev. Prvič, ugotovljene potencialne dejavnike lahko razdelimo na dve glavni kategoriji, in sicer na notranje dejavnike (velikost, sektor, starost, okoljska ozaveščenost itd.) in zunanje dejavnike (ustreznost okoljskih predpisov za podjetja, spodbujevalni ukrepi na okoljskem področju, kakovost institucij itd.). In drugič, obsežna navedba stroškov izpolnjevanja obveznosti v okviru kazalnikov strogosti okoljske regulative nakazuje, da lahko relativna višina omenjenih stroškov pomembno vpliva na produktivnost podjetij. Vpliv v praksi: Opredelitev dejavnikov, ki vplivajo na višino stroškov izpolnjevanja obveznosti iz okoljske regulative, snovalcem politik nudi dragocen vpogled v izvajanje okoljskih predpisov in njihovo večjo učinkovitost, na račun katere pa ti ne smejo predstavljati prevelikega bremena za nekatere vrste podjetij. Izvirnost/Pomen: Iz pregleda literature o stroških izpolnjevanja obveznosti iz okoljske regulative izhaja, da doslej še nobena študija ni celovito obravnavala vseh možnih dejavnikov, ki vplivajo na relativno višino teh stroškov za podjetja.

• Keywords: stroški izpolnjevanja obveznosti iz okoljske regulative, okoljska regulativa, produktivnost, Porterjeva hipoteza, digitalna zrelost

Projects

• Funder: ARRS - Slovenian Research Agency
• Project number: P2-0426
• Name: Digitalna preobrazba za pametno javno upravljanje