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Linking induced technological change, and environmental regulation: Evidence from patenting in the U.S. auto industry

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  • Lee, Jaegul
  • Veloso, Francisco M.
  • Hounshell, David A.

Abstract

This article uses a carefully screened patent database in automobile emission control technologies and a detailed regulatory action analysis to examine firms’ innovation in response to U.S. technology-forcing auto emissions standards enacted between 1970 and 1998. The study finds that under the performance-based technology-forcing (PBTF) auto emissions regulations, both automakers and component suppliers innovated and introduced more advanced emission control technologies for automobile applications. The study also shows that stringent PBTF regulation temporarily induced domestic U.S. firms to become more innovative than foreign firms that operated in the local U.S. market during the early phase of the regulatory regime. Findings of this research strongly imply that government intervention in the form of technology-forcing regulation can drive firms to invest in technological innovation.

Suggested Citation

  • Lee, Jaegul & Veloso, Francisco M. & Hounshell, David A., 2011. "Linking induced technological change, and environmental regulation: Evidence from patenting in the U.S. auto industry," Research Policy, Elsevier, vol. 40(9), pages 1240-1252.
  • Handle: RePEc:eee:respol:v:40:y:2011:i:9:p:1240-1252
    DOI: 10.1016/j.respol.2011.06.006
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    References listed on IDEAS

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    Cited by:

    1. Rubashkina, Yana & Galeotti, Marzio & Verdolini, Elena, 2015. "Environmental regulation and competitiveness: Empirical evidence on the Porter Hypothesis from European manufacturing sectors," Energy Policy, Elsevier, vol. 83(C), pages 288-300.
    2. Barbieri, Nicolò, 2016. "Fuel prices and the invention crowding out effect: Releasing the automotive industry from its dependence on fossil fuel," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 222-234.
    3. Reis, Anabela & Heitor, Manuel & Amaral, Miguel & Mendonça, Joana, 2016. "Revisiting industrial policy: Lessons learned from the establishment of an automotive OEM in Portugal," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 195-205.
    4. Nicolò Barbieri, 2015. "Environmental policy and invention crowding out. Unlocking the automotive industry from fossil fuel path dependence," SEEDS Working Papers 0615, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Mar 2015.
    5. de Vries, Henk J. & Verhagen, W. Pieter, 2016. "Impact of changes in regulatory performance standards on innovation: A case of energy performance standards for newly-built houses," Technovation, Elsevier, vol. 48, pages 56-68.
    6. Antoine Dechezleprêtre & Richard Perkins & Eric Neumayer, 2012. "Regulatory Distance and the Transfer of New Environmentally Sound Technologies: Evidence from the Automobile Sector," Working Papers 2012.33, Fondazione Eni Enrico Mattei.
    7. Franckx, Laurent, 2014. "Regulatory emission limits for mobile sources and the Porter hypothesis: a survey of the literature," MPRA Paper 56448, University Library of Munich, Germany.
    8. Francesco Vona & Francesco Nicolli & Lionel Nesta, 2012. "Determinants of renewable energy innovation: environmental policies vs. market regulation," Sciences Po publications 2012-05, Sciences Po.
    9. repec:gam:jsusta:v:9:y:2017:i:5:p:862-:d:99174 is not listed on IDEAS
    10. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    11. 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.
    12. Barbieri, Nicolò, 2015. "Investigating the impacts of technological position and European environmental regulation on green automotive patent activity," Ecological Economics, Elsevier, vol. 117(C), pages 140-152.
    13. repec:eee:eneeco:v:67:y:2017:i:c:p:545-553 is not listed on IDEAS
    14. Skeete, Jean-Paul, 2017. "Examining the role of policy design and policy interaction in EU automotive emissions performance gaps," Energy Policy, Elsevier, vol. 104(C), pages 373-381.
    15. Nelson, Andrew & Earle, Andrew & Howard-Grenville, Jennifer & Haack, Julie & Young, Doug, 2014. "Do innovation measures actually measure innovation? Obliteration, symbolic adoption, and other finicky challenges in tracking innovation diffusion," Research Policy, Elsevier, vol. 43(6), pages 927-940.
    16. Dechezleprêtre, Antoine & Neumayer, Eric & Perkins, Richard, 2015. "Environmental regulation and the cross-border diffusion of new technology: Evidence from automobile patents," Research Policy, Elsevier, vol. 44(1), pages 244-257.
    17. Morales-Lage, Rafael & Bengochea-Morancho, Aurelia & Martínez-Zarzoso, Inmaculada, 2016. "Does environmental policy stringency foster innovation and productivity in OECD countries?," Center for European, Governance and Economic Development Research Discussion Papers 282, University of Goettingen, Department of Economics.
    18. Malen, Joel & Marcus, Alfred A., 2017. "Promoting clean energy technology entrepreneurship: The role of external context," Energy Policy, Elsevier, vol. 102(C), pages 7-15.
    19. Bi, Kexin & Huang, Ping & Ye, Hui, 2015. "Risk identification, evaluation and response of low-carbon technological innovation under the global value chain: A case of the Chinese manufacturing industry," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 238-248.
    20. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09j0h0ji242 is not listed on IDEAS
    21. Mare Sarr & Joëlle Noailly, 2017. "Innovation, Diffusion, Growth and the Environment: Taking Stock and Charting New Directions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 393-407, March.
    22. Wang, Yan & Shen, Neng, 2016. "Environmental regulation and environmental productivity: The case of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 758-766.
    23. Vivek Ghosal & Jiayao Ni, 2015. "Competition and Innovation in Automobile Markets," CESifo Working Paper Series 5504, CESifo Group Munich.
    24. F. Stam & Neil Thompson & Andrea Herrmann & Marko Hekkert, 2012. "The Environmental Regulation Paradox for Clean Tech Ventures," Scales Research Reports H201217, EIM Business and Policy Research.
    25. 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.

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