ABSTRACT
One major view is that environmental regulation constrains strategic choices and limits innovations, thereby disadvantaging environmentally regulated firms (Sanchez, 1997). An opposing view is that environmental regulation enhances competitiveness by encouraging efficiency gains through innovation. Firms that develop technological expertise in response to environmental regulations hold an advantage over their competitors, who are obligated to purchase and learn to use the new technology (Porter, 1991; Porter and Linde, 1995).
