The Porter Hypothesis, proposed by Harvard Business School economist Michael Porter, challenges the conventional view that environmental regulation necessarily hinders business performance. Instead, it suggests that well-designed environmental policies can enhance competitiveness by fostering innovation and resource efficiency. Over the past 20 years, this hypothesis has sparked extensive research, leading to various theoretical developments and empirical studies. The paper reviews these contributions, highlighting key insights and policy implications. It emphasizes the importance of flexible, market-based regulations and the role of training, industrial policies, and organizational conditions in realizing the benefits of environmental regulation. Despite some conflicting evidence, the hypothesis remains influential, and future research should focus on longitudinal studies, global comparisons, and addressing methodological challenges to better understand the complex dynamics between environmental regulation, innovation, and competitiveness.The Porter Hypothesis, proposed by Harvard Business School economist Michael Porter, challenges the conventional view that environmental regulation necessarily hinders business performance. Instead, it suggests that well-designed environmental policies can enhance competitiveness by fostering innovation and resource efficiency. Over the past 20 years, this hypothesis has sparked extensive research, leading to various theoretical developments and empirical studies. The paper reviews these contributions, highlighting key insights and policy implications. It emphasizes the importance of flexible, market-based regulations and the role of training, industrial policies, and organizational conditions in realizing the benefits of environmental regulation. Despite some conflicting evidence, the hypothesis remains influential, and future research should focus on longitudinal studies, global comparisons, and addressing methodological challenges to better understand the complex dynamics between environmental regulation, innovation, and competitiveness.