earticle

영어

This paper theoretically reviews the researches about the effects of environmental regulations on economic performances. According to the previous researches, we propose that environmental regulations affect industrial economic performances through three channels: export, foreign direct investment, and innovative activities. We collected the related data over the period of 1997-2009 from 14 industries in Korea. The emission amounts of the eight kinds of pollutants were used to calculate the pollutant index as the measure of stringency of environmental regulations. We used the simultaneous equations model and the 3SLS method to solve the endogenous problems between the variables. The results indicated that environmental regulations negatively affect industrial economic performances through export channels. Environmental regulations have insignificant effects on inflow FDI. Although environmental regulations motivate companies to increase R&D investments, it does not influence industrial economic performances through R&D investments. In the future, Korean government should implement various policies of environmental regulations, reinforce economic policies and soft policies to enhance efficiency and flexibility.