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What are the determinants of investment in environmental R&D?

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  • Maria Teresa Costa-Campi

    (University of Barcelona and Chair of Energy Sustainability, Barcelona Institute of Economics (IEB))

  • José García-Quevedo

    (University of Barcelona and Chair of Energy Sustainability, Barcelona Institute of Economics (IEB))

  • Ester Martínez-Ros

    (Universidad Carlos III de Madrid)

Abstract

To face the challenges posed by climate change, environmental R&D and innovation are critical factors if we hope to cut emissions; yet, investment in environmental R&D remains below the social optimum. The aim of this paper is to analyse the determinants of investment in environmental innovation and to detect the differences, if any, with the determinants of investment in general innovation. R&D investment is one of the key variables for analysing the resources devoted to innovation; however, data constraints hamper the use of this variable when examining the drivers of eco-innovation. The literature reports that demand factors in general and collaboration with stakeholders play a crucial role in generating such investment. In addition, this paper similarly examines the relationship between environmental innovation R&D expenditure and a range of policy instruments, including environmental regulation and other policy measures including R&D subsidies and environmental taxes. The empirical analysis is carried out for 22 manufacturing sectors in Spain for the period 2008–2013. To overcome problems of data availability, we construct a comprehensive database from different surveys.

Suggested Citation

  • Maria Teresa Costa-Campi & José García-Quevedo & Ester Martínez-Ros, 2016. "What are the determinants of investment in environmental R&D?," Working Papers 2016/13, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2016-13
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental innovation; tax and demand instruments; panel data;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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