Environmental compliance costs and innovation activity in UK manufacturing industries
AbstractWe examine the relationship between environmental regulations and innovation, using data from UK manufacturing industry during 2000-2006. We estimate a dynamic model of innovation behaviour, and explicitly account for the likely endogeneity of our measure of the burden of environmental regulations (pollution abatement costs). Our results indicate that environmental R&D and investment in environmental capital are stimulated by greater pollution abatement pressures. However, we do not ?find a positive impact of environmental compliance costs on total R&D or total capital accumulation. New environmental innovations may therefore have a crowding out effect on other potentially more productive investments or avenues for innovation.
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Bibliographic InfoPaper provided by University of Nottingham, School of Economics in its series Discussion Papers with number 10/08.
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Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
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Web page: http://www.nottingham.ac.uk/economics/
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Innovation; Pollution abatement expenditures; Panel data.;
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- Alonso-Borrego, Cesar & Arellano, Manuel, 1999. "Symmetrically Normalized Instrumental-Variable Estimation Using Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 36-49, January.
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