A literature review on the links between environmental regulation and competitiveness

Abstract

The effects of environmental regulation on competitiveness is always a topic under debate for policymakers and practitioners. The article describes the different ways of defining and measuring the effects of environmental regulation on competition and market forces and synthesizes the most updated findings on the relationship between these dimensions. It also proposes an in depth analysis of the most recent empirical studies, with a particular focus on the buildings and construction (B&C) sector, which often is a substantial contributor to the most important countries’ economic indicators. We find that two variables have proved to be both (i) key in defining to what extent and under what conditions environmental regulation exerts adverse or positive effects on competitiveness and (ii) difficult to nail down: forms of regulation and responses by business.