Win–win opportunities and environmental regulation: testing of porter hypothesis for Indian manufacturing industries

This paper studies the effect of environmental regulation on the productive efficiency of water polluting industries in India. The panel data of 92 firms belonging to sugar industry of India during the period 1996–99 are used to test the Porter hypothesis of having win–win opportunities for the firms subjected to the regulation. The main empirical result is that the technical efficiency of firms increases with the degree of compliance of firms to the environmental regulation and the water conservation efforts there by supporting the Porter hypothesis.