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Unveiling the dynamic relation between R&D and emission abatement

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  • Corradini, Massimiliano
  • Costantini, Valeria
  • Mancinelli, Susanna
  • Mazzanti, Massimiliano

Abstract

This paper examines investment decisions regarding innovation and emissions abatement in a dynamic framework, where knowledge stock is an impure public good. We take a sector perspective based on neo Schumpeterian theory that emphasises the role of both sector and innovation systems. We interpret results taking into account sector and country based institutional, market and policy conditions. Econometric outcomes, based on an original sector dataset which exploits the NAMEA source for 15 European Union (EU) countries and 23 manufacturing sectors in the time frame 1995–2006, show that innovation efforts are positively correlated to various spillover effects. Those effects include the emissions abatement of the other sectors, thus pointing out the relevance of forces which opposite typical free riding behaviour in public or mixed public good frameworks. Different reactivity strengths for different global and local emissions also allow us to disclose the specific role of technological and economic complementarity. When considering CO2 emissions, innovation is mainly triggered by national interactions, a fact which is coherent with a dominance of national innovation and policy systems in the EU. The result is also consistent with the fact that CO2 abatement technologies heavily regard energy efficiency that provides joint private and public benefits. The fact that NMVOC abatement efforts by other sectors from abroad impact R&D investments positively means that, in some cases, a realm of sectoral systems of innovation is also relevant. The different evidence between local and global externalities is surely explained not only by the different technological and economic contents, but also by the fact that the EU has witnessed different policy implementation.

Suggested Citation

  • Corradini, Massimiliano & Costantini, Valeria & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Unveiling the dynamic relation between R&D and emission abatement," Ecological Economics, Elsevier, vol. 102(C), pages 48-59.
  • Handle: RePEc:eee:ecolec:v:102:y:2014:i:c:p:48-59
    DOI: 10.1016/j.ecolecon.2014.03.017
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    Cited by:

    1. Valeria Costantini & Francesco Crespi & Giovanni Marin & Elena Paglialunga, 2016. "Eco-innovation, sustainable supply chains and environmental performance in European industries," LEM Papers Series 2016/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Flavio M. Menezes & Jorge Pereira, 2017. "Emissions abatement R&D: Dynamic competition in supply schedules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(4), pages 841-859, August.
    3. Caroline Mothe & Thuc Uyen Nguyen-Thi, 2017. "Persistent openness and environmental innovation: An empirical analysis of French manufacturing firms," Post-Print hal-01609129, HAL.
    4. Costantini, Valeria & Crespi, Francesco & Martini, Chiara & Pennacchio, Luca, 2015. "Demand-pull and technology-push public support for eco-innovation: The case of the biofuels sector," Research Policy, Elsevier, vol. 44(3), pages 577-595.
    5. Claudia Ghisetti & Susanna Mancinelli & Massimiliano Mazzanti & Mariangela Zoli, 2017. "Financial barriers and environmental innovations: evidence from EU manufacturing firms," Climate Policy, Taylor & Francis Journals, vol. 17(0), pages 131-147, June.
    6. Sam Aflaki & Syed Abul Basher & Andrea Masini, 2015. "Does Economic Growth Matter? Technology-Push, Demand-Pull and Endogenous Drivers of Innovation in the Renewable Energy Industry," Working Papers hal-02011423, HAL.
    7. Ghisetti, Claudia & Marzucchi, Alberto & Montresor, Sandro, 2015. "The open eco-innovation mode. An empirical investigation of eleven European countries," Research Policy, Elsevier, vol. 44(5), pages 1080-1093.
    8. Nicolò Barbieri & Claudia Ghisetti & Marianna Gilli & Giovanni Marin & Francesco Nicolli, 2016. "A Survey Of The Literature On Environmental Innovation Based On Main Path Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 596-623, July.
    9. Grafström, Jonas, 2017. "An Econometric Analysis of Divergence of Renewable Energy Invention Efforts in Europe," Ratio Working Papers 295, The Ratio Institute.
    10. Claudia Ghisetti & Massimiliano Mazzanti & Susanna Mancinelli & Mariangela Zoli, 2015. "Do financial constraints make the environment worse off? Understanding the effects of financial barriers on environmental innovations," SEEDS Working Papers 0115, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2015.
    11. Patricia Laurens & Christian Le Bas & Stéphane Lhuillery & Antoine Schoen, 2017. "The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital," Post-Print hal-01515119, HAL.
    12. MOTHE Caroline & NGUYEN Thi Thuc Uyen, 2016. "Openness and environmental innovation: Does time-horizon matter?," LISER Working Paper Series 2016-13, LISER.
    13. Patricia Laurens & Christian Le Bas & Stéphane Lhuillery & Antoine Schoen, 2017. "The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(4), pages 311-333, May.
    14. Jonas Grafström, 2018. "Divergence of renewable energy invention efforts in Europe: an econometric analysis based on patent counts," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(4), pages 829-859, October.
    15. Lorena D’Agostino, 2015. "How MNEs respond to environmental regulation: integrating the Porter hypothesis and the pollution haven hypothesis," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(2), pages 245-269, August.

    More about this item

    Keywords

    Emission abatement; Innovation system; Economic–environmental accounts; Sector dynamics; Knowledge spillovers; Impure public good; NAMEA;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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