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What triggers environmental management and innovation? Empirical evidence for Germany

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  • Frondel, Manuel
  • Horbach, Jens
  • Rennings, Klaus

Abstract

It is frequently hypothesized that environmental management systems (EMSs) may improve firms' environmental innovation performance. Whether this hypothesis is true is as critical for environmental policy as questions pertaining to the relevant incentives for (1) a firm's voluntary adoption of an EMS and (2) its environmental innovation behavior. Based on ample empirical evidence for German manufacturing, this paper addresses the simultaneity of these issues on the basis of a recursive bivariate probit model that explores the hypothesis that a facility's decision on innovation activities is correlated with the decision on EMS adoption. Our empirical results, indicating that environmental innovation activities are not associated with EMS implementation nor any other single policy instrument, reflect the perceptions of the survey respondents and, hence, should be interpreted as correlations rather than causal relationships. According to these perceptions, innovation behavior seems to be mainly correlated with the stringency of environmental policy.

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  • Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2008. "What triggers environmental management and innovation? Empirical evidence for Germany," Ecological Economics, Elsevier, vol. 66(1), pages 153-160, May.
    • Handle: RePEc:eee:ecolec:v:66:y:2008:i:1:p:153-160
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    More about this item

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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