1,720,980 research outputs found
Eco-innovation & competitiveness: A Porter hypothesis perspective
No full textEnvironmental issues have become of prime importance nowadays so that they are a recurrent subject at the table of the world’s most powerful committees. Hence, the relationship between environmental regulation, eco-innovation and firms’ competitiveness has always been equivocal. All the concerned groups of interest claim to have the right argument without a convincing proof. The present book will shed some light on one of the most controversial hypothesis in the last couple of decades: the Porter Hypothesis. The book is divided in two main parts: First, a review of the existing literature around the porter hypothesis, including some skeptical opinions. The second part consists of an empirical model to test the Porter hypothesis based on a panel of nearly 30,000 German companies. This book will therefore be suitable for students and researchers who want to have a synthesized idea about the subject with an econometric analysis to accept or refute the six hypotheses stipulated in this work. The book will also be a useful tool to all decision makers whether firm's managers or civil servants who want to have an up to date idea of the debate concerning regulation and competitiveness
Time for Environmental Regulation to pave the way for Eco-Innovation
No full textThe reconciliation of the three pillars of the European Union Sustainable Development Strategy is one of the most daunting tasks policymakers have to face. However, the environmental urgency calls for courageous and unprecedented measures that go beyond political convictions. One point on which all stakeholders seem to agree upon is that eco-innovation appears to be the solution to this pressing issue. Indeed, by supporting greener technologies, the EU would be able to ensure a high level of environmental protection while securing jobs in these new green sectors and enabling economic growth at the same time. By focusing on the special case of policies aimed at reducing emissions from passenger cars, the policy background is analysed in order to identify the policy alternatives. Some policy recommendations to induce eco-innovation at the business level are drawn in order to allow the achievement of a win-win situation
The Effect of Policy-induced Eco-innovation on Business Competitiveness: Evidence on the Porter Hypothesis
No full textThe Porter hypothesis claims that well-designed environmental regulation could enhance business competitiveness by driving eco-innovation at the firm level. The objective of this paper is to test the Porter hypothesis by investigating the effect of regulation-induced eco-innovation on business competitiveness using a dynamic model. The model uses several measures of business competitiveness and distinguishes between different types of eco-innovations. The model also accounts for the moderating effect of the different drivers of eco-innovation, namely legally binding regulations such as standards or taxes, incentives such as government funding or market demand and self-regulation such as sectoral agreements. The results show that while regulation-induced eco-innovations have a positive short-term effect on business competitiveness, the effect vanishes in the dynamic model. By contrast, resource efficiency eco-innovations that are market-driven show a resilient positive effect. Furthermore, externality-reducing eco-innovations affect business competitiveness negatively, irrespective of their motives. Lastly, there is evidence of complementarity between product and process eco-innovations. In light of these results, policymakers are exhorted to design policies that create market dynamics, in the long-run, fostering both resource efficiency and product eco-innovations that support each other in order to achieve the win-win situation intended in the Porter hypothesis
Environmental regulation and eco-innovation: the Porter hypothesis refined
No full textThe paper analyses the relationship between environmental regulation and eco-innovation. The relationship is tested using a German firm-based panel and a dynamic count data model estimating the propensity of firms to innovate in response to five initiating factors, namely the fulfillment of existing legal requirements, expectations towards future legal requirements, financial incentives, demand for eco-innovations and self-commitment. The heterogeneity of firms is controlled for using R&D intensity, the size, the sector and the region of the company. The results answer the central question concerning the design of environmental policies in order to foster eco-innovation. Comparing a static model to a dynamic one shows that only long term objectives and market incentives are positively associated with eco-innovation. Conventional regulatory tools, namely legally binding instruments, are not effective for triggering innovative behavior at the firm level. The results do not allow to confirm the Porter hypothesis but rather offer a refined version, emphasizing the nuances that apply to the concept of “regulation”. The claim is that what matters is not the type of the policy instrument but rather the perception of the instrument by firms
Regulation-induced Technological Change to Achieve Sustainable Development
No full textThe transition toward sustainability requires significant, rather than incremental, technological change. It is, therefore, of the utmost importance to identify the sources, drivers and development pathways of technological change. Evolutionary pathways are unlikely to achieve the ambitious change needed. We thus argue for a paradigm shift toward what we would describe as [r]evolutionary dynamics. A limitation of the stimulus-response model and the Porter hypothesis of regulation-induced innovation is its focus on the incumbent firms' reaction to regulation. The new entrants' dynamics are missing. What we propose is in the same vein as Schumpeter's creative destruction, with the effect of entry driven by regulation on innovation. We review the literature to identify instances of stringent regulatory shocks that are technology-forcing. We show that stringent regulation, when properly designed and accompanied with the right economic incentives, leads to disruptive rather than sustaining innovations. Incidentally, these innovations may have a significant positive impact on economic performance, the environment and worker health and safety. The evidence provided may improve the acceptability of stringent regulation at the political level
Environmental Regulation and Eco-Innovation : Insights from Diffusion of Innovations Theory
Full text linkThe paper analyses the relationship between environmental regulation and environmental innovation based on the diffusion of innovations theory. The relationship is tested using a German firm-based panel and a Count Data model, over a short period of time with a large number of observations. We estimate the propensity of firms to innovate in response to five initiating factors, namely the fulfilment of legal requirements, expectations towards legal requirements, public funding, demand for environmental innovations and self-commitment. We also control for R&D intensity, the region and the sector of the company and filter for companies that account for their environmental impact. The results answer the central question concerning the design of environmental policies in order to foster innovation. Comparing a static model to a dynamic one, we show that only dynamic and market-based policies are positively associated with environmental innovation. Conventional regulatory tools, namely technology-based command and control, are not effective for triggering innovative behaviour at the firm level. Lastly, we show that environmental regulation is a necessary condition for eco-innovation
Environmental regulation and eco-innovation: insights from diffusion of innovations theory
No full textThe paper analyses the relationship between environmental regulation and environmental innovation with insights from the diffusion of innovations theory. We base the analysis on three theoretical approaches: neoclassical, evolutionary and induced innovation. The relationship is tested using a German firm-based panel and a count data model. We estimate the propensity of firms to innovate in response to five initiating factors, namely the fulfillment of existing legal requirements, expectations towards future legal requirements, financial incentives, demand for environmental innovations and self-commitment. We also check for the relevance of the interactions between policy instruments as well as the influence of internal factors and path dependency. In addition, we control for R&D intensity, the region, the sector of the company and filter for companies that account for their environmental impact. The results answer the central question concerning the design of environmental policies in order to foster innovation. Comparing a static model to a dynamic one, we show that only long term objectives and market incentives are positively associated with environmental innovation. Conventional regulatory tools, namely legally binding instruments, are not effective for triggering innovative behaviour at the firm level. Lastly, we show that the threat of future environmental regulation is a necessary condition for self-regulation
Does eco-innovation improve business competitiveness? A dynamic panel data analysis
No full textThe Porter Hypothesis claims that there is a positive relationship between environmental regulation, environmental innovation and business competitiveness. However, the empirical results in the literature remain inconclusive. In this paper, we limit the investigation to the relationship between environmental innovation and business competitiveness. This relationship is tested using a firm-based German panel data and a dynamic limited dependent variable model. We estimate the impact on return on sales of a combination of time varying and time invariant regressors, namely R&D intensity, the size and the market share on the one hand, and the sector and the region of the business on the other hand. The results show that there is indeed an overall positive relationship between environmental innovation and business competitiveness. However, when controlling for marketing intensity or limiting the data to specific sectors the relationship becomes insignificant due to omitted-variable bias. These results help explain why some researchers have come to find a positive effect of eco-innovation on business competitiveness while other have not
Environmental regulation and eco-innovation: the Porter Hypothesis
No full textThe paper analyses the relationship between environmental regulation and environmental innovation with insights from the diffusion of innovations theory. The analysis is based on three theoretical approaches: neoclassical, evolutionary and induced innovation. The relationship is tested using a German firm-based panel and a count data model estimating the propensity of firms to innovate in response to five initiating factors, namely the fulfillment of existing legal requirements, expectations towards future legal requirements, financial incentives, demand for environmental innovations and self-commitment. The relevance of the interactions between policy instruments as well as the influence of internal factors and path dependency is also tested. In addition, R&D intensity, the region, the sector of the company are controlled for and a filter for companies that account for their environmental impact is applied. The results answer the central question concerning the design of environmental policies in order to foster innovation. Comparing a static model to a dynamic one shows that only long term objectives and market incentives are positively associated with environmental innovation. Conventional regulatory tools, namely legally binding instruments, are not effective for triggering innovative behaviour at the firm level. Lastly, the results show that the threat of future environmental regulation is a necessary condition for self-regulation. The results do not allow to confirm the Porter hypothesis but rather offer a refined version, emphasizing the nuances that apply to the conception of "regulation". In addition to the fact that not all types of regulation trigger eco-innovation, the results show that although necessary, environmental regulation is certainly not a sufficient condition for eco-innovation
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