This paper analyzes the impact of environmental regulation on innovation and international competitiveness, testing the weak, narrow, and strong versions of Porter's hypotheses. Using the OECD Environmental Stringency Policy Index, the study measures green policies, distinguishing between market, non-market instruments, and technology support policies. The technology gap approach to trade is applied, along with a simultaneous-equation system econometric model that incorporates pollution intensity as a moderating factor. The results support the weak and strong versions of Porter's hypotheses, showing that the positive impact of regulation on innovation and exports increases with a country's pollution intensity. This suggests that green policies, if properly coordinated, can enhance sustainability and international competitiveness. The study also finds that market-based policies have a more significant impact on innovation and exports than non-market-based policies, while technology support policies contribute to competitiveness. The findings highlight the importance of considering pollution intensity when evaluating the effects of environmental regulation on innovation and international competitiveness. The results support the idea that stringent environmental regulations can lead to cost savings and productivity gains through innovation, and that the effectiveness of green policies increases with higher pollution intensity. The study contributes to the literature by testing the strong version of the Porter hypothesis at the country level and by considering both direct and indirect impacts of regulation on international competitiveness. The findings have important policy implications, suggesting that green policies can be a win-win strategy for sustainability and competitiveness when properly implemented.This paper analyzes the impact of environmental regulation on innovation and international competitiveness, testing the weak, narrow, and strong versions of Porter's hypotheses. Using the OECD Environmental Stringency Policy Index, the study measures green policies, distinguishing between market, non-market instruments, and technology support policies. The technology gap approach to trade is applied, along with a simultaneous-equation system econometric model that incorporates pollution intensity as a moderating factor. The results support the weak and strong versions of Porter's hypotheses, showing that the positive impact of regulation on innovation and exports increases with a country's pollution intensity. This suggests that green policies, if properly coordinated, can enhance sustainability and international competitiveness. The study also finds that market-based policies have a more significant impact on innovation and exports than non-market-based policies, while technology support policies contribute to competitiveness. The findings highlight the importance of considering pollution intensity when evaluating the effects of environmental regulation on innovation and international competitiveness. The results support the idea that stringent environmental regulations can lead to cost savings and productivity gains through innovation, and that the effectiveness of green policies increases with higher pollution intensity. The study contributes to the literature by testing the strong version of the Porter hypothesis at the country level and by considering both direct and indirect impacts of regulation on international competitiveness. The findings have important policy implications, suggesting that green policies can be a win-win strategy for sustainability and competitiveness when properly implemented.