The document discusses testing the Porter Hypothesis, which proposes that well-designed environmental regulations do not inhibit but rather stimulate innovation and competitiveness. It notes that previous tests of the hypothesis may have been flawed by incorrectly specifying the Heckscher-Ohlin-Vanek model of trade and failing to account for correlations between environmental regulations, production factors, and consumption. Re-examining the model and using different empirical specifications could yield different results about the effects of environmental regulation on productivity and competitiveness.