1. An analysis of relationship between environmental regulations and firm performance with moderating effects of product market competition: Empirical evidence from Pakistan.
- Author
-
Javeed, Sohail Ahmad, Latief, Rashid, and Lefen, Lin
- Subjects
- *
ECONOMIC competition , *ENVIRONMENTAL regulations , *FIXED effects model , *HERFINDAHL-Hirschman index , *ECONOMIC geography , *HUMAN beings - Abstract
Many countries are facing environmental issues that affect the natural climate and life of human beings, therefore, governments have developed the strategies and regulations to control the industrial negative effects on the environment which is called environmental regulations (ER). To extend the porter hypothesis, we examined the moderating effect of product market competition (PMC) to find the circumstances that affect the association between ER and FP. We have divided PMC into high and low product market competition (HPMC and LPMC) by following the Herfindahl-Hirschman Index (HHI). The empirical investigation of this study demonstrates the following outcomes: ER indicates a statistically significant and positive relationship with FP. Furthermore, HPMC has great importance for FP, while LPMC has shown a negative relationship with FP. Besides, we tested the moderating effects of HPMC and LPMC on the association between ER and FP. The moderating effects of HPMC have significant and positive effects on the association between ER and FP. On the other side, the moderating effects of LPMC have significant and negative effects on the association between ER and FP. Moreover, this study promotes the importance of ER and PMC for firms. This study is beneficial for owners, investors, policymakers, and governments to form comprehensive and viable ER for reducing environmental negative effects. • This study tested the association of ER and FP along Product Market Competition (PMC). • This study employed fixed effect and GMM models and positive association between ER and FP occurred. • HPMC shows positive effects on FP. LPMC shows negative effects on FP. • The interaction of HPMC has shown positive effects on the association of ER and FP. • The interaction of LPMC has shown negative effects on the association of ER and FP. [ABSTRACT FROM AUTHOR]
- Published
- 2020
- Full Text
- View/download PDF