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Does host market regulation induce cross‐border environmental innovation?

Author

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  • Giovanni Marin
  • Antonello Zanfei

Abstract

This paper evaluates the effect of host‐country environmental policy stringency on the offshoring of green patents for 2000 top world R&D performers. It is shown that a more stringent environmental regulation triggers patent offshoring in the field of green technologies. Results are robust to various different specifications, to alternative definitions of innovation offshoring and of regulatory restrictions, to controls for firm and country‐level characteristics and to the consideration of possible endogeneity of regulation. We interpret these findings as evidence that MNEs can take advantage from their exposure to multiple institutional settings, reducing the costs of, and increasing the payoff from, green innovation offshoring. It is also suggested that R&D subsidies and non‐market‐based regulatory measures are more important than market‐based instruments as drivers of cross‐border environmental innovation.

Suggested Citation

  • Giovanni Marin & Antonello Zanfei, 2019. "Does host market regulation induce cross‐border environmental innovation?," The World Economy, Wiley Blackwell, vol. 42(7), pages 2089-2119, July.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:7:p:2089-2119
    DOI: 10.1111/twec.12784
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    Cited by:

    1. Corrocher, Nicoletta & Grabner, Simone Maria & Morrison, Andrea, 2024. "Green technological diversification: The role of international linkages in leaders, followers and catching-up countries," Research Policy, Elsevier, vol. 53(4).
    2. Davide Castellani & Giovanni Marin & Sandro Montresor & Antonello Zanfei, 2020. "Foreign Direct Investments and Regional Specialization in Environmental Technologies," SEEDS Working Papers 0620, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Apr 2020.
    3. Dezhong Duan & Hong Jin, 2022. "Environmental Regulation and Green Technology Diffusion: A Case Study of Yangtze River Delta, China," Land, MDPI, vol. 11(11), pages 1-14, October.
    4. Dezhong Duan & Qifan Xia, 2021. "Does Environmental Regulation Promote Environmental Innovation? An Empirical Study of Cities in China," IJERPH, MDPI, vol. 19(1), pages 1-18, December.
    5. Zhongju Liao & Yan Liu & Mengsha Li, 2020. "Is environmental innovation contagious? A study on the mechanism of individual firms' environmental innovation affecting the industry," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(6), pages 1787-1795, November.
    6. Bao, Yangming & Li, Jie & Yang, Jinyu, 2025. "Green pathways: The role of international air connections in corporate green innovation," Economic Modelling, Elsevier, vol. 149(C).
    7. Antimiani, Alessandro & Costantini, Valeria & Paglialunga, Elena, 2023. "Fossil fuels subsidy removal and the EU carbon neutrality policy," Energy Economics, Elsevier, vol. 119(C).
    8. Andrea M. Bassi & Valeria Costantini & Elena Paglialunga, 2021. "Modelling the European Union Sustainability Transition: A Soft-Linking Approach," Sustainability, MDPI, vol. 13(11), pages 1-24, June.
    9. Milani, Sahar & Neumann, Rebecca, 2022. "R&D, patents, and financing constraints of the top global innovative firms," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 546-567.
    10. Consoli, Davide & Costantini, Valeria & Paglialunga, Elena, 2023. "We're in this together: Sustainable energy and economic competitiveness in the EU," Research Policy, Elsevier, vol. 52(1).
    11. Ghisetti, Claudia & Montresor, Sandro & Vezzani, Antonio, 2021. "Design and environmental technologies: Does ‘green-matching’ actually help?," Research Policy, Elsevier, vol. 50(5).
    12. Corrocher, Nicoletta & Mancusi, Maria Luisa, 2021. "International collaborations in green energy technologies: What is the role of distance in environmental policy stringency?," Energy Policy, Elsevier, vol. 156(C).
    13. Castellani, Davide & Marin, Giovanni & Montresor, Sandro & Zanfei, Antonello, 2022. "Greenfield foreign direct investments and regional environmental technologies," Research Policy, Elsevier, vol. 51(1).

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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