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Environmental Regulation and Innovation: A Panel Data Study

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  • Adam B. Jaffe
  • Karen Palmer

Abstract

In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors, by stimulating domestic innovation. We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries. We find that lagged environmental compliance expenditures have significant positive effect on R&D expenditures when we control for unobserved industry-specific effects. We find little evidence, however, that industries' inventive output (as measured by patent applications) is related to compliance costs).

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5545.

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Date of creation: Apr 1996
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Publication status: published as Review of Economics and Statistics (1997): 610-619.
Handle: RePEc:nbr:nberwo:5545

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  1. Griliches, Zvi, 1992. " The Search for R&D Spillovers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages S29-47, Supplemen.
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  11. Malueg, David A., 1989. "Emission credit trading and the incentive to adopt new pollution abatement technology," Journal of Environmental Economics and Management, Elsevier, vol. 16(1), pages 52-57, January.
  12. McCain, Roger A, 1978. "Endogenous Bias in Technical Progress and Environmental Policy," American Economic Review, American Economic Association, vol. 68(4), pages 538-46, September.
  13. repec:fth:harver:1473 is not listed on IDEAS
  14. Hackett Steven C., 1995. "Pollution-Controlling Innovation in Oligopolistic Industries: Some Comparisons between Patent Races and Research Joint Ventures," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 339-356, November.
  15. Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc.
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