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The purpose of this paper is to examine firms’ knowledge-sourcing behavior in green technology development with respect to the home country’s market- vs nonmarket environmental policy stringency.

This paper empirically analyzes the effects of market and nonmarket environmental policy stringency on firms’ knowledge sourcing activity with patent data from OECD countries during 1991–2010, across five categories of green technologies.

When a nation establishes more stringent market environmental policies, firms likely source more international knowledge rather than domestic knowledge about green technology, up to a point. After that level, this balance shifts (inverted U-shaped curve) due to the risks associated with greater investment costs and commerciality. Nonmarket environmental policies instead should exhibit a positive, linear relationship with international relative to domestic knowledge sourcing. This study also reveals the dynamic roles of a firm’s green technological capability with market-based environmental policy stringency and a substitutive role of the capability with nonmarket-based environmental policy stringency.

This study shows the effect of market and nonmarket environmental policy stringency on firms’ knowledge sourcing. The findings provide meaningful implications for policymakers regarding the optimal levels of market and nonmarket environmental policy stringency that will enhance their countries’ green technology development.

This paper enriches the literature of environmental policy and knowledge sourcing and offers the direction of future research of how environmental policy stringency influences a firm’s knowledge sourcing for green technology development.

Trade of environmentally sensitive goods (ESGs) is often exposed to countries with less stringent regulations suggesting that those countries have comparative advantage in the polluting sector. The Group of Twenty (G20) members are among the highest polluters, globally. Different stringency policies are enacted time to time in G20 to control environment pollution. However, the impact of policy stringency on export performance of ESGs is seldom examined. The paper aims to address some of the issues concerning this matter.

The present study aims to address the short run and long-run association between Revealed Comparative Advantage of ESGs and Environmental Policy Stringency Index for the period of 1990–2019 in G20. Periodic fluctuations and time adjustment mechanism are also studied. Second Generation Panel Cointegration, Vector Error Correction, Impulse Response Function and Variance Decomposition methods are employed to address the objectives.

Result is evident that more exposure to stringent environmental regulations reduces the comparative advantage of ESGs in the long run. But there is no evidence of the short-run relationship between the variables. The possible reason could be that new regulations enacted prove fruitful in the long run.

The novelty of the study is to focus on inter linkages between stringency and global export competitiveness in G20, almost nonexistent in the past studies. The study also provides a road map to policymakers to find out potential ways for sustainable development by balancing environmental stringency measures and international trade.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0560

The purpose of this paper is to examine the role of activism in determining the identity of the “green” median voter and the influence of the green voter on environmental regulatory stringency in the US states.

Regulatory stringency is measured using output weighted abatement spending and an industry concentration adjusted index of state environmental compliance costs for the period 1989-1994. Activism measures include environmental initiatives, median support for pollution standards and voter ideology. Fixed-effects panel methodology is used in empirical estimation.

The authors find that activism increases stringency in regulating overall as well as media-specific pollution. The results particularly highlight the nuances of different approaches to activism and their varied impact across pollution media.

A drawback of the empirical estimation is the lack of continuous historical abatement spending data. A longer panel with alternative stringency measure(s) would add explanatory power to activism, especially since some activism measures capture slow-changing institutional factors.

The study identifies the conditions under which activism can have the most impact on a society's environmental outcomes since pollution varies in damages, hence abatement costs, across pollution media.

The paper adds to the existing literature by incorporating three alternative measures of environmental activism to systematically investigate its impact on environmental stringency within a fixed-effects regression design. It also promotes a deeper understanding of the efficacy of the activism process by deconstructing policy stringency across pollution media to show that activism and its impacts are more nuanced than previously studied.

To construct an index (index of environmental sensitivity performance) to be used in a cross‐country trade model in order to analyze the effect of various degrees of environmental stringency on the trade patterns, and especially on the export performance of the countries.

The gravity model of trade is used in order to find the effects of environmental stringency on the variation in trade flows.

The study shows that environmental stringency has an important impact on the export of the countries. The impact of the degree of environmental stringency on the exports is significantly negative suggesting an inverse relationship between export values and relative environmental sensitivity performance of the nations.

This study supports the argument that the environmental stringency level differential between developing and developed nations is a crucial criteria in terms of explaining shifts in the trade patterns and international specialization of the countries.

Textile, listed as one of the highly environmentally sensitive goods, its trade is susceptible to be influenced by the implementation of stringent environmental policies. This paper aims to investigate the long-run relationship between revealed comparative advantage (RCA) and Environmental Policy Stringency Index (EPSI) for textile exports of G20 countries in panel data setup.

Apart from trend analysis, the authors have employed Pedroni and Westerlund panel cointegration method and fully modified ordinary least square (FMOLS) method to study the long-run relationship between RCA and EPSI in presence of cross-sectional dependence.

A strong link between trade and environmental stringency is observed for textile in the present study. For G20 countries, slight evidence of the Pollution Haven Hypothesis has also been witnessed in the study. Correspondingly, the results reveal the presence of long-run association between the variables under study, implying that stringent environmental policies reduce RCA for some countries, whereas some countries witness the Porter hypothesis.

The results imply that policy formulation should not aim at limiting the efforts of connecting RCA to environmental stringency but to set trade policies in a wider framework, considering environmental concerns, as these are inseparable subjects. However, this study also provides relevant real-world implications that can support further research.

The present study has important implications for textile exporters such as green innovations. The Porter hypothesis can be a beneficial tool for G20 exporters in enhancing their export performance, especially for the ones dealing in environmentally sensitive goods. This study offers relevant policy implications and provides directions for future research on global trade and environment nexus.

This study deals in a debatable area of research that evaluates the interlinkages between environmental stringency and global trade flows in the G20 countries. An important observation of the study is the asymmetrical nature of policy stringency across different countries and its impact on trade. The unavailability of updated data is the limitation of the present study.

This paper aims to, under the framework of the pollution haven hypothesis (PHH), test the theory that foreign direct investment (FDI) creates an intra-host country pollution haven in developing nations by studying the contemporary case of China.

This empirical analysis has used a panel dataset of 30 provinces that was analyzed for the period of 1997-2011. An Oaxaca decomposition was also implemented to examine the effects of environmental stringency on regional pollution.

The estimates indicate that openness to FDI generally appears to be good for the environment. The results of estimation show that the western region of China has developed a potential “comparative advantage” in pollution-intensive industries, thanks to the strong incentive of economic expansion. However, further estimates concerning the location decisions of FDI suggest that the providers of FDI still prefer to locate in the coastal regions of China, where a tighter environmental regulation policy has been imposed. The findings suggest that the better infrastructure and technology spillover of environmental policy-making might be more attractive to FDI than comparatively weak environmental stringency.

This study applies a model advanced in previous theoretical literature which divides the effects of trade into the categories of scale, technique and composition. It also contributes to the understanding of the PHH in the context of intra-host country analysis.

The authors investigate the impact of the stringency of environmental policy on the financial performance of European automobile manufacturers. This paper contributes to the debate about the impact of environmental policy on a firm's competitive performance.

The authors use cross-country sector-level panel data for 71 firms from 18 European countries from 2010 to 2019. The authors apply a fixed-effect model and then, to address the endogeneity issues, the authors use the generalized method of moments (GMM) model. To further examine the validity of the results, the authors use a data-mining modeling approach as a robustness test.

By considering the dynamic impact of environmental policy and overcoming the endogeneity issues, the results show that the impact of the stringency of environmental policy on a firm's financial performance depends on the time horizon: the stringency of environmental policy has a short-term negative impact but a long-term positive impact on a firm's financial performance.

The authors limited the study to the auto industry in Europe. In addition, future research could consider the impact of environmental policy on other financial performance indicators such as Return on Sales or Return on Equity. Also, it would be interesting to conduct a similar study in the United States or China using a firm-level data set to examine the robustness of the results.

Stringency of environmental policy improves a firm's financial performance in the long term. It is essential for firms and managers to consider the dynamic impacts of environmental policy on their financial performance and adopt a long-term perspective when evaluating the costs and benefits of complying with environmental regulations. The findings help management develop a long-term vision for investment and budget allocation. The results support management's view for strategic decision-making against the common budget argument and challenges for stockholders when it comes to adopting new technologies and planning long-term investment.

It is crucial for firms to recognize the broader societal benefits that come with environmental policy. Firms must not only focus on their financial performance but also on their social responsibility to protect the environment and contribute to the greater good. Therefore, firms must take a long-term perspective and recognize the broader societal benefits of environmental policy in order to make informed decisions that support both their financial success and their social responsibility.

This paper contributes to the literature by helping to explain the inconsistent results of studies about the impact of environmental policy on a firm's competitiveness. Using a firm's financial performance as one of the main metrics for competitiveness, this study takes into account both endogeneity and contemporaneity in evaluating the impact of the stringency of environmental policy on a firm's financial performance.

Stakeholders such as customers, governments and environmental organisations are more concerned than ever about the impact of supply chain practices on the environment, leading firms to introduce environmental requirements into their supply contracts. While the extant literature on supply chains acknowledges this trend, it fails to inform comprehensively on the concept of “stringent environmental requirement” and its consequences. The purpose of this paper is to investigate this concept and explore how such requirements may translate into supplier environmental performance.

Qualitative methodology was adopted by the study and data were collected through conducting eight case studies in the Bangladesh ready-made garment (RMG) industry.

A number of factors were found to be influencing suppliers’ perception of stringency, such as uncertainty relating to the newness and deadline of buyers’ environmental requirements, the complexity of implementing the requirements, and the use of buyer-specific frameworks. The research also shows that suppliers’ efforts in building environmental capability play a vital role in dealing with stringent environmental requirements.

The case studies are limited to the Bangladesh RMG industry. Given that environmental regulations vary across different countries and industries, the data may not reflect all the possible variations in stringent environmental requirements.

The new insight proposed by this research can guide firms to further understand how supplier environmental performance and the sustainability of their supply chain can be achieved. The research provides broad insight into how suppliers can address stringent environmental requirements and improve their environmental performance.

This research establishes evidence for the relatively new phenomenon of “stringent environmental requirements”, and develops a theoretical framework to demonstrate the relationships among the critical determinants relevant to this phenomenon.

While previous research has identified that environmental innovation is shaped by a variety of drivers, researchers have devoted limited attention to the role of nature-based resources in the country. Building on environmental innovation theory and the natural resource-based view of the firm, this study introduces ecological resource deficits as a novel driver of environmental innovation. The authors explore how ecological resource deficits interact with institutional and regulatory drivers as well as firm-level technology drivers to explain the extent of environmental innovation across different countries.

The authors apply fuzzy-set qualitative comparative analysis to a multi-source dataset to identify different pathways for environmental innovation across 28 countries.

Findings show that higher environmental innovation is a function of ecological resource deficits complemented by the presence of at least two other conditions. Moreover, the results show that environmental policy stringency and societal expectations are substitute conditions of environmental innovation.

This study reveals the interdependences between different conditions for environmental innovation across countries contributing to a more nuanced understanding of the geography of environmental innovation.