For Germany the stringency of environmental regulation has been evaluated in cross-national comparisons to be above average in comparison to other industrialised countries. Therefore the central aim of this research is to examine through which environmental measures German firms have adjusted to this fairly stringent regulation, at what costs and how their competitiveness was affected.To this end a case study approach was chosen in which the impact of three different environmental policy areas were examined for various industries. German data were contrasted with that in similar (matched) firms in Ireland, the UK and Spain where environmental regulation still tends to be less stringent. The case studies were carried out in the food industry, the packaging sector and the cement industry.
For a robust testing of the potential effects of environmental regulation on competitiveness the need for a detailed production of empirical data was recognised. Therefore the matched plant comparison was selected as research method; it is an interview-based sample survey technique which is comparable to a benchmarking exercise. It systematically compares supply-side features of the firm after controlling for size, ownership and product type. While no formal model is used for the specification of a production function, the technique has yielded robust measures of the importance of a range of factors influencing relative competitiveness in a variety of industries across the EU. The matched plant technique allows access to sometimes confidential data on environmental costs and economic performance. This is particularly important since the focus of the study was on the cost and environmental effects of clean technology solutions which are not covered in the census data. With the co-operation from management of industrial enterprises net costs of compliance can be calculated and their importance relative to other factors of competitiveness can be determined.
The thesis is based on 160 interviews in manufacturing plants in Germany, the Republic of Ireland, United Kingdom and Spain.
A micro level analysis showed that abatement initiatives had in general been implemented without economic damage and did not touch on the core business. Moreover, German sample plants ranked environmental pressure as relatively unimportant compared with other competitive pressures. Finally, the low absolute levels of compliance costs, at least in two of the case studies, explained why environmental regulation cannot have a great influence on competitiveness in the chosen sectors. High productivity levels were not among the essential factors explaining our findings. It implies for our case studies that also plants with lower productivity can withstand high compliance costs.
Publication of the thesis is planned at Edward Elgar (Cheltenham, UK). Articles based on the thesis are being sent to various scientific journals.
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