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Environmental Policies, Innovation and Productivity in the EU

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  • Roberta De Santis
  • Cecilia Jona Lasinio

Abstract

In this paper we test the weak Porter hypothesis on a sample of European economies in the period 1995-2008. We focus on the channels through which tighter environmental regulation affects productivity and innovation. Our findings suggest that the “weak” Porter hypothesis cannot be rejected and that the choice of policy instruments is not neutral. In particular, market based environmental stringency measures seem to be the most suitable to stimulate innovation and productivity growth. Consistently with the strategic reorientation of environmental policies in the European Union since the end of the eighties, our results indicate that the EU might privilege market based instruments in order to meet more effectively the 2030 targets, especially through the channels of innovation and productivity enhancement.

Suggested Citation

  • Roberta De Santis & Cecilia Jona Lasinio, 2015. "Environmental Policies, Innovation and Productivity in the EU," LEQS – LSE 'Europe in Question' Discussion Paper Series 100, European Institute, LSE.
    • Handle: RePEc:eiq:eileqs:100
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    File URL: http://www.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper100.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Djula Borozan, 2023. "Institutions and Environmentally Adjusted Efficiency," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4489-4510, December.
    3. Haoran Li & Min Zhou & Qing Xia & Xiaoru Hao & Jian Wang, 2022. "Has Central Environmental Protection Inspection Promoted High-Quality Economic Development?—A Case Study from China," Sustainability, MDPI, vol. 14(18), pages 1-16, September.
    4. Kim, Incheol & Pantzalis, Christos & Zhang, Zhengyi, 2021. "Multinationality and the value of green innovation," Journal of Corporate Finance, Elsevier, vol. 69(C).
    5. Jing Chen & Liyuan Hu, 2022. "Does Environmental Regulation Drive Economic Growth through Technological Innovation: Application of Nonlinear and Spatial Spillover Effect," Sustainability, MDPI, vol. 14(24), pages 1-15, December.
    6. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    7. Tan, Yan & Uprasen, Utai, 2022. "The effect of foreign direct investment on renewable energy consumption subject to the moderating effect of environmental regulation: Evidence from the BRICS countries," Renewable Energy, Elsevier, vol. 201(P2), pages 135-149.
    8. Wenjuan Tu & Rui Shi, 2022. "Influence of Environmental Regulation on the International Competitiveness of the High-Tech Industry: Evidence from China," Sustainability, MDPI, vol. 15(1), pages 1-15, December.
    9. Carl Gaigné & Lota D. Tamini, 2021. "Environmental Taxation and Import Demand for Environmental Goods: Theory and Evidence from the European Union," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(2), pages 307-352, February.
    10. Bazyli Czyżewski & Marta Guth, 2021. "Impact of Policy and Factor Intensity on Sustainable Value of European Agriculture: Exploring Trade-Offs of Environmental, Economic and Social Efficiency at the Regional Level," Agriculture, MDPI, vol. 11(1), pages 1-19, January.
    11. Bazyli Czyzewski & Agnieszka Brelik, 2019. "Providing Environmental Public Goods under the Common Agricultural Policy as a Cure for Market Failure," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 457-469.

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    More about this item

    Keywords

    environmental regulation; productivity; innovation; Porter hypothesis;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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