Environment Competitive Environment

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In 1970 was the first Earth Day which was the point where modern environmental movements started. Since that time the US government has been spending tremendous amount of sources in order to reduce environmental damages created by industrial and commercial activities. Along with that a lot of studies have been made over the question whether environmental regulations have impact on the competitiveness of the domestic industry. Economist and business people usually perceive the idea that environmental regulations increase costs and slow down productivity. Different environmental regulations can affect competitiveness among countries. In other words, it leads to the question – do environmental regulations place firms at competitive disadvantage?…show more content…
The meaning at the level of the firm or sector level, frequently measures in terms of performance of regulated entities’ ability to compete on international markets. A business is considered to be competitive, at the level of the firm, if it is able to produce a product or service at more attractive price than its domestic and international firms in the same sphere of business. As long as the shareholder’s goal of those entities is to increase long-term profitability and value of the company, competitiveness is closely related with achieving this goal of profit performance. Competitiveness promises employees’ compensations and returns to its owners. The general idea of trade is based on comparative advantage, meaning that countries export goods which they produce more efficiently than other countries and import those good in which they are less efficient. In theory we can measure the real effect of environmental regulations on competitiveness by” identifying the change of net exports holding real wage and exchange rates constant”. (Stavins, Jaffe, Peterson,Portney, 1994) We would like to know this change before any changes in the exchange rates simply because if other industries have increased their net exports should not be thought to have become more competitive if it is due to fall in exchange…show more content…
In other words, big leading firms can experience pressure from environmental regulations and at the same time small ones experience pressure from larger companies and importers. The main reason I that they require their suppliers to comply with all green standards and measures. Clean technologies are implemented slowly by firms. In their process of work they mainly involve major changes concerning capital expenditures, substitute materials and process redesign have been rare. This problem has mainly been in presence for small to medium-sized firms. All companies and firms invest in environment technologies only when they are influenced by government’s regulations. In most of the cases business organizations address pollution issues rather than trying to implement green technology in order to create source of competitive

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