A weak version of the Porter hypothesis claims that strict environmental policy provides positive innovation incentives, hence triggering improved competitiveness and securing environmental quality. In a comparative way, this paper empirically tests this hypothesis across countries by linking environmental stringency to innovation proxied by patents in the field of SO2 abatement over the period 1970-2000. Three different models of environmental stringency are examined. Two of these models do not reveal a positive significant effect on innovation as a result of increased stringency. In the theoretically preferred model, however, a positive relationship between environmental stringency and innovation is obtained.
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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
18.
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Arundel, Anthony & Kemp, Rene, 2009.
"Measuring Eco-Innovation,"
UNU-MERIT Working Paper Series
017, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
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