[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/10065.html
   My bibliography  Save this paper

The impact of regulation-driven environmental innovation on innovation success and firm performance

Author

Listed:
  • Rennings, Klaus
  • Rammer, Christian
Abstract
The impact of environmental innovations on firm performance is ambiguous. On the one hand, regulatory-driven environmental innovation may impose additional costs to firms and lower their profits. On the other hand, eco-innovators could profit from lower uncertainty in innovation due to regulatory standards and demand-generating effects of regulation. In this paper we analyse (a) whether regulation-driven environmental innovation generate similar innovation success compared to other types of product and process innovation, and (b) whether regulation-driven environmental innovation increase or decrease firm success (as measured by return on sales). Using firm data from the German innovation survey, we find that both product and process innovations driven by environmental regulation generate similar success in terms of sales with new products and cost savings as other innovations do. However, we find different effects when looking on the field of environmental regulation that triggered innovations. Regulations in favour of sustainable mobility contribute to higher sales with market novelties while regulations in the field of water management lower this type of innovation success. With regard to a firm’s price-cost margin, new processes implemented in order to comply with environmental regulation requirements lower profitability, indicating higher costs for this type of innovation which cannot be passed on prices. Higher profit margins can be observed for firms with innovations triggered by regulations on recycling and waste management as well as on resource efficiency.

Suggested Citation

  • Rennings, Klaus & Rammer, Christian, 2010. "The impact of regulation-driven environmental innovation on innovation success and firm performance," ZEW Discussion Papers 10-065, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10065
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/41437/1/636377490.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Beise, Marian & Rennings, Klaus, 2005. "Lead markets and regulation: a framework for analyzing the international diffusion of environmental innovations," Ecological Economics, Elsevier, vol. 52(1), pages 5-17, January.
    2. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    3. Manuel Frondel & Jens Horbach & Klaus Rennings, 2007. "End‐of‐pipe or cleaner production? An empirical comparison of environmental innovation decisions across OECD countries," Business Strategy and the Environment, Wiley Blackwell, vol. 16(8), pages 571-584, December.
    4. Christian Rammer & Dirk Czarnitzki & Alfred Spielkamp, 2009. "Innovation success of non-R&D-performers: substituting technology by management in SMEs," Small Business Economics, Springer, vol. 33(1), pages 35-58, June.
    5. Popp, David, 2006. "International innovation and diffusion of air pollution control technologies: the effects of NOX and SO2 regulation in the US, Japan, and Germany," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 46-71, January.
    6. Rehfeld, Katharina-Maria & Rennings, Klaus & Ziegler, Andreas, 2007. "Integrated product policy and environmental product innovations: An empirical analysis," Ecological Economics, Elsevier, vol. 61(1), pages 91-100, February.
    7. Klaus Rennings & Christian Rammer, 2009. "Increasing Energy and Resource Efficiency through Innovation: An Explorative Analysis Using Innovation Survey Data," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(5), pages 442-459, December.
    8. Henry G. Grabowksi & Dennis C. Mueller, 1978. "Industrial Research and Development, Intangible Capital Stocks, and Firm Profit Rates," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 328-343, Autumn.
    9. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    10. Beise, Marian & Cleff, Thomas, 2004. "Assessing the lead market potential of countries for innovation projects," Journal of International Management, Elsevier, vol. 10(4), pages 453-477.
    11. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
    12. Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
    13. Brunnermeier, Smita B. & Cohen, Mark A., 2003. "Determinants of environmental innovation in US manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 278-293, March.
    14. Nick Johnstone (ed.), 2007. "Environmental Policy and Corporate Behaviour," Books, Edward Elgar Publishing, number 12551.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sanni, Maruf, 2018. "Drivers of eco-innovation in the manufacturing sector of Nigeria," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 303-314.
    2. Pinget, Amandine, 2016. "Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME [Specificities of determinants for environmental innovation : an approach applied to SMEs]," MPRA Paper 80108, University Library of Munich, Germany.
    3. Tilmann Rave & Frank Goetzke & Mario Larch, 2011. "The Determinants of Environmental Innovations and Patenting: Germany Reconsidered," ifo Working Paper Series 97, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Giulio Cainelli & Massimiliano Mazzanti & Simone Borghesi, 2012. "The European Emission Trading Scheme and environmental innovation diffusion: Empirical analyses using Italian CIS data," Working Papers 201201, University of Ferrara, Department of Economics.
    5. Horbach, Jens & Rammer, Christian & Rennings, Klaus, 2012. "Determinants of eco-innovations by type of environmental impact — The role of regulatory push/pull, technology push and market pull," Ecological Economics, Elsevier, vol. 78(C), pages 112-122.
    6. Vanessa OLTRA & Maïder SAINT JEAN, 2009. "Environmental Innovations and Industrial Dynamics (In French)," Cahiers du GREThA (2007-2019) 2009-22, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    7. Borghesi, Simone & Cainelli, Giulio & Mazzanti, Massimiliano, 2012. "Brown Sunsets and Green Dawns in the Industrial Sector: Environmental Innovations, Firm Behavior and the European Emission Trading," Climate Change and Sustainable Development 121701, Fondazione Eni Enrico Mattei (FEEM).
    8. Chassagnon, Virgile & Haned, Naciba, 2015. "The relevance of innovation leadership for environmental benefits: A firm-level empirical analysis on French firms," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 194-207.
    9. del Río González, Pablo, 2009. "The empirical analysis of the determinants for environmental technological change: A research agenda," Ecological Economics, Elsevier, vol. 68(3), pages 861-878, January.
    10. Alexandra Rese & Anke Kutschke & Daniel Baier, 2016. "Analyzing The Relative Influence Of Supply Side, Demand Side And Regulatory Factors On The Success Of Collaborative Energy Innovation Projects," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-43, February.
    11. Böhringer, Christoph & Moslener, Ulf & Oberndorfer, Ulrich & Ziegler, Andreas, 2012. "Clean and productive? Empirical evidence from the German manufacturing industry," Research Policy, Elsevier, vol. 41(2), pages 442-451.
    12. Gianluca ORSATTI, 2019. "Public R&D and green knowledge diffusion:\r\nEvidence from patent citation data," Cahiers du GREThA (2007-2019) 2019-17, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    13. Pablo del Río & Cristina Peñasco & Desiderio Romero‐Jordán, 2015. "Distinctive Features of Environmental Innovators: An Econometric Analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 24(6), pages 361-385, September.
    14. Ghisetti, Claudia & Marzucchi, Alberto & Montresor, Sandro, 2015. "The open eco-innovation mode. An empirical investigation of eleven European countries," Research Policy, Elsevier, vol. 44(5), pages 1080-1093.
    15. Ghisetti, Claudia & Pontoni, Federico, 2015. "Investigating policy and R&D effects on environmental innovation: A meta-analysis," Ecological Economics, Elsevier, vol. 118(C), pages 57-66.
    16. Vitaliy Roud & Thomas Wolfgang Thurner, 2018. "The Influence of State‐Ownership on Eco‐Innovations in Russian Manufacturing Firms," Journal of Industrial Ecology, Yale University, vol. 22(5), pages 1213-1227, October.
    17. Durán-Romero, Gemma & López, Ana M. & Beliaeva, Tatiana & Ferasso, Marcos & Garonne, Christophe & Jones, Paul, 2020. "Bridging the gap between circular economy and climate change mitigation policies through eco-innovations and Quintuple Helix Model," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    18. Giovanni Marin & Francesca Lotti, 2017. "Productivity effects of eco-innovations using data on eco-patents," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 125-148.
    19. Brian Chi-ang Lin & Siqi Zheng & Nicolò Barbieri & Claudia Ghisetti & Marianna Gilli & Giovanni Marin & Francesco Nicolli, 2016. "A Survey Of The Literature On Environmental Innovation Based On Main Path Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 596-623, July.
    20. Costantini, Valeria & Crespi, Francesco & Palma, Alessandro, 2017. "Characterizing the policy mix and its impact on eco-innovation: A patent analysis of energy-efficient technologies," Research Policy, Elsevier, vol. 46(4), pages 799-819.

    More about this item

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:10065. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.