ECB paper examines green regulation’s productivity impact

Tougher rules seem to hurt productivity, but might raise it over longer horizons, researchers say

Polluted city skyline

A working paper published by the European Central Bank investigates whether tougher environmental regulation increases or decreases firms’ productivity.

A 1995 paper argued that firms’ productivity could rise in response to environmental regulation. Environmental regulation and productivity growth in the euro area: testing the Porter hypothesis examines the evidence for this in the eurozone.

Nicola Benatti, Martin Groiss, Petra Kelly and Paloma Lopez-Garcia’s paper uses country-level data on

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