ABOUT BOOK

The literature on the relationship between environmental regulations (ERs) and environmental performance (EP) of firms has largely ignored consideration of different kinds of ERs and the potential non-linear relationship between ERs and EP. This study uses the literature to differentiate three types of ERs (command-and-control regulations, market-based regulations and informal regulations) and further investigates (i) the linear links between different types of ERs and EP, and (ii) the potential non-linear relationships. The results provide support that the links between ERs and EP are not linear for command-and-control regulations and market-based regulations but non-linear and positive. For informal regulations, both the linear and non-linear relationships are not significant. We further test the impacts of time lag effects. Command-and-control regulations have impacts on EP both in current and the preceding years, whereas market-based regulations only affect EP in current year rather than in the preceding years. It takes 2 years to see the effects of informal regulations on EP