Regulations and Corporate Environmental Responsibility: evidence from a panel of firms in Transition Economies

ABSTRACT: This study investigates how a set of regulations influences the pro-environmental actions of firms in a panel of 25 Transition Countries. For this purpose, we use the enterprise survey data developed by the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the World Bank Group (WBG). Based on a logit modeling and on the construction of different indicators characterizing the environmental actions of the firms, we find that regulation affects positively the decision of firms to implement an eco-action. Results are confirmed when we examine the different eco-action categories. Findings obtained from the interactions are also worthy of note. In particular, we find that board of directors are more prone to consider shareholder interests, and a strong network effect emerges between EU candidate countries and EU economies