Abstract

We tested the validity of the Porter hypothesis for North Carolina hog production from 1993 to 2014 using the theory of induced innovation to understand how government regulations affected innovation and productivity as well as motivate our empirical analysis. The Porter hypothesis states that government regulations that are constructed to reduce pollution could increase firm productivity. The theory of induced innovation states that as a given input becomes expensive through government regulations, producers innovate new technologies to use less of that given input. We used an econometric model on state-level data from 1993 to 2014 for Minnesota, Iowa, Illinois, North Carolina, Ohio, and Alabama using two types of fixed effects regression models and two types of regression models with slope dummy variables. Non-federal (NONFED) and federal (FED) agricultural research and development expenditures were proxies for innovation inputs. Stocking density (STOCKD) was used to capture the effects of government regulations on innovation and hog productivity. Results suggested that government regulations impacted hog productivity in North Carolina, providing evidence for the Porter Hypothesis; however, the innovation variables were only significant in the slope dummy litter rate model, which provided little evidence for the theory of induced innovation.

Advisor

Moledina, Amyaz

Second Advisor

Burnell, Jim

Department

Business Economics

Disciplines

Agribusiness | Agricultural Economics | Agriculture Law | Other Animal Sciences

Publication Date

2016

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2016 Paul J. Kelbly