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Entrepreneurs for a low carbon world: How environmental knowledge and policy shape the creation and financing of green start-ups

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  • Cojoianu, Theodor F.
  • Clark, Gordon L.
  • Hoepner, Andreas G.F.
  • Veneri, Paolo
  • Wójcik, Dariusz

Abstract

We investigate how different types of environmental policies and new regional environmental knowledge affect new venture creation in and financing of green (low carbon), brown (fossil fuel) and gray (unrelated to natural resources) technologies across 24 OECD countries and 293 regions over the period 2001-13. We find that new regional environmental knowledge positively impacts new venture creation in green technologies, and moderately in gray industries. Gray industries also benefit from enhanced start-up financing in regions where new environmental knowledge is created, confirming that environmental knowledge creation yields positive externalities beyond the green sector. We also find that a more stringent environmental policy regime negatively impacts the creation of new ventures across sectors, but most prominently, it discourages new fossil fuel ventures. However, once entrepreneurs decide to start a new business, stringent environmental policies have on aggregate a positive effect on new venture financing across sectors, particularly through feed-in-tariffs and emission standards.

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  • Cojoianu, Theodor F. & Clark, Gordon L. & Hoepner, Andreas G.F. & Veneri, Paolo & Wójcik, Dariusz, 2020. "Entrepreneurs for a low carbon world: How environmental knowledge and policy shape the creation and financing of green start-ups," Research Policy, Elsevier, vol. 49(6).
  • Handle: RePEc:eee:respol:v:49:y:2020:i:6:s0048733320300688
    DOI: 10.1016/j.respol.2020.103988
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    More about this item

    Keywords

    Environmental entrepreneurship; Environmental policy; Environmental finance; Knowledge spillover; Green venture capital; Fossil fuels;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • 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
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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