ENVIRONMENTAL POLICIES AND TRADE COMPETITIVENESS: THE MALAYSIAN PALM OIL DOWNSTREAM INDUSTRY

Authors

  • Norashida Othman Faculty of Business and Management, Universiti Teknologi MARA (UiTM)
  • Zulkornain Yusop Putra Business School (PBS) School of Business and Economics, Universiti Putra Malaysia
  • Mohd Mansor Ismail Institute of Agricultural and Food Policy Studies, Universiti Putra Malaysia ABSTRACT

DOI:

https://doi.org/10.33736/ijbs.5611.2023

Keywords:

Palm oil, trade competitiveness, environmental policies, Dynamic Generalized Method of Moments (DGMM), porter hypothesis

Abstract

This paper explore how export competitiveness in the Malaysian palm oil downstream industry is affected by European Union (EU) environmental regulation. Porter (1990) suggests that environmental policies may foster international competitiveness. To investigate the impact of EU environmental policies on trade competitiveness in the Malaysian palm oil downstream industry, the dynamic generalized method of moments (DGMM) is employed. The final results reveal that EU environmental regulations have a positive impact on palm oil industry competitiveness. This result is consistent with the Porter Hypothesis, which argues that a more stringent environmental regulation can trigger innovation to non-compliance cost. Palm oil downstream innovation is crucial to improve the overall competitiveness of the industry, including the smallholders’ sector. This implies that the Malaysian government may want to introduce certain measures, such as energy taxes to promote the use of renewable energy. This may lead to more sustainable palm oil production which may improve the overall competitiveness of the palm oil downstream industry.

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Published

2023-04-07

How to Cite

Norashida Othman, Zulkornain Yusop, & Mohd Mansor Ismail. (2023). ENVIRONMENTAL POLICIES AND TRADE COMPETITIVENESS: THE MALAYSIAN PALM OIL DOWNSTREAM INDUSTRY. International Journal of Business and Society, 24(1), 184–201. https://doi.org/10.33736/ijbs.5611.2023