Drivers of environmental regulation costs and their perception by firms : evidence from Slovenia

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

This study explores the driving forces behind environmental regulation costs and the factors influencing managers’ perceptions of these costs. Drawing from a literature review, a theoretical model was constructed to identify factors influencing the size of environmental regulation costs and firms’ perceptions thereof. The study uses data from a survey of 198 Slovenian firms subject to environmental regulations. Structural equation modeling (SEM) was applied to test and estimate the causal relationships among the identified factors. The results reveal that environmental regulatory obligations and firm size are the most dominant factors affecting the costs of environmental regulation. Regulatory complexity has the greatest impact on firms’ cost perceptions, followed by firm size, institutional quality, and actual costs of environmental regulation, with the latter having a surprisingly weak impact on perceptions. Following managerial cognition theory, the study recommends simplifying regulations while integrating financial and non-financial measures and environmental awareness into regulatory frameworks and corporate strategies to encourage a more proactive environmental performance. This approach aims to enhance firms’ management of environmental regulation costs and perceptions, offering a comprehensive framework for understanding their multifaceted nature.

• Language: English
• Keywords: environmental regulatory costs, environmental regulation, Slovenian firms, institutional theory, resource-based view
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: FU - Faculty of Administration
• Publication status: Published
• Publication version: Version of Record
• Year: 2025
• Number of pages: 10 str.
• Numbering: Vol. 501, art. 145274
• PID: 20.500.12556/RUL-168032
• UDC: 504.05:658.14/.17:005.96(497.4)
• ISSN on article: 1879-1786
• DOI: 10.1016/j.jclepro.2025.145274
• COBISS.SI-ID: 229957891
• Publication date in RUL: 26.03.2025

Record is a part of a journal

• Title: Journal of cleaner production
• Shortened title: J. clean. prod.
• Publisher: Elsevier
• ISSN: 1879-1786
• COBISS.SI-ID: 23108357

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
• Keywords: stroški okoljskih predpisov, okoljska regulativa, energijski prehod, institucionalna teorija, na virih temelječ pogled

Projects

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

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: J5-4576
• Name: Integriran pristop za hkratno reševanje okoljske in gospodarske krize