THE PORTER HYPOTHESIS REVISITED: THE CROSS-BORDER SPILLOVER EFFECTS OF FOREIGN ENVIRONMENTAL REGULATIONS ON NATIONAL COMPETITIVENESS

This study extends the Porter hypothesis by adopting a cross-border approach because, in a hyper-globalized economy, the impact of foreign policies might diffuse across borders through international trade. We examine the cross-border spillover effects of foreign environmental policies on innovation and economic growth of other countries. Using a countryyear panel dataset, our study empirically finds that environmental policy spillovers contribute to improving green innovations, total factor productivity, and gross domestic product growth of other countries, which implies the borderless effect of the Porter hypothesis.