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Can Direct Regulations Spur Innovations in Environmental Technologies? A Study on Firm‐Level Patenting

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  • Marit E. Klemetsen
  • Brita Bye
  • Arvid Raknerud

Abstract

Using a rich Norwegian panel dataset that includes information about the type and number of patent applications, direct environmental regulations, and a large number of control variables, we analyze the effects of direct regulations on environmental patenting. We use inspection violation status as a measure of regulatory stringency, while controlling for risk class. Violation status captures the probability that a firm might be sanctioned for violating its emission permit. Controlling for risk class captures firm heterogeneity related to dirtiness and inspection frequency. We empirically identify strong and significant effects on innovations resulting from the implicit regulatory costs of direct regulations.

Suggested Citation

  • Marit E. Klemetsen & Brita Bye & Arvid Raknerud, 2018. "Can Direct Regulations Spur Innovations in Environmental Technologies? A Study on Firm‐Level Patenting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(2), pages 338-371, April.
    • Handle: RePEc:bla:scandj:v:120:y:2018:i:2:p:338-371
    DOI: 10.1111/sjoe.12201
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    Cited by:

    1. David Popp, 2019. "Environmental policy and innovation: a decade of research," CESifo Working Paper Series 7544, CESifo.
    2. David Popp, 2019. "Environmental Policy and Innovation: A Decade of Research," NBER Working Papers 25631, National Bureau of Economic Research, Inc.
    3. Fan, Jianshuang & Liu, Dongtao & Zhou, Lin & Ding, Liang & Zhang, Junshen, 2025. "Environmental regulation, resource dependence, and innovation and entrepreneurship vitality of Chinese cites," Resources Policy, Elsevier, vol. 101(C).
    4. Pengyuan Xu & Meiqing Zhang & Min Gui, 2020. "How R&D Financial Subsidies, Regional R&D Input, and Intellectual Property Protection Affect the Sustainable Patent Output of SMEs: Evidence from China," Sustainability, MDPI, vol. 12(3), pages 1-18, February.
    5. Xiang Cai & Jing Li & Jun Wu & Haijing Zhang & Ping Chen & Xin Huang, 2022. "The Impact of Enterprise R&D Investment and Government Subsidies on Technological Progress: Evidence from China’s PV Industry," Energies, MDPI, vol. 15(12), pages 1-26, June.
    6. Xiaoke Zhao & Xuhui Ding & Liang Li, 2021. "Research on Environmental Regulation, Technological Innovation and Green Transformation of Manufacturing Industry in the Yangtze River Economic Belt," Sustainability, MDPI, vol. 13(18), pages 1-15, September.
    7. Yan, Zheming & Yu, Ying & Du, Kerui & Zhang, Ning, 2024. "How does environmental regulation promote green technology innovation? Evidence from China's total emission control policy," Ecological Economics, Elsevier, vol. 219(C).
    8. De Xia & Wenhua Chen & Qinglu Gao & Rui Zhang & Yundong Zhang, 2021. "Research on Enterprises’ Intention to Adopt Green Technology Imposed by Environmental Regulations with Perspective of State Ownership," Sustainability, MDPI, vol. 13(3), pages 1-19, January.
    9. Jun Liu & Peng Zhang & Xiaofei Wang, 2025. "Exploring the Mechanisms and Pathways Through Which the Digital Transformation of Manufacturing Enterprises Enhances Green and Low-Carbon Performance Under the “Dual Carbon” Goals," Sustainability, MDPI, vol. 17(3), pages 1-25, January.
    10. Qiansheng Gong & Xi Tang & Xiangyu Wang, 2022. "Can Low-Carbon Pilot City Policies Effectively Promote High-Quality Urban Economic Development?—Quasi-Natural Experiments Based on 227 Cities," Sustainability, MDPI, vol. 14(22), pages 1-18, November.
    11. Xuan Yang & Shihao Mao & Luxuan Sun & Chao Feng & Yinshuang Xia, 2022. "The Effect of Economic Policy Uncertainty on Green Technology Innovation: Evidence from China’s Enterprises," Sustainability, MDPI, vol. 14(18), pages 1-17, September.
    12. Hongyu Zhai & Yaliu Yang & Heping Ding & Yu Zhou, 2025. "Research on the Configuration Path of Regional Green Innovation in Space and Time: Dynamic QCA Analysis Based on Provincial Panel Data," Sustainability, MDPI, vol. 17(5), pages 1-21, February.
    13. Jun Shen & Jiana He & Xiuli Liu & Qinqin Shi, 2025. "Complement or Crowd Out? The Impact of Cross-Tool Carbon Control Policy Combination on Green Innovation in Chinese Cities," Sustainability, MDPI, vol. 17(15), pages 1-26, July.
    14. Brita Bye & Marit Klemetsen & Arvid Raknerud, 2019. "The impact of public R&D support on firms' patenting," Discussion Papers 911, Statistics Norway, Research Department.

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