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Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands

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  • George van Leeuwen
  • Pierre Mohnen

Abstract

Almost all empirical research that has attempted to assess the validity of the Porter hypothesis (PH) has started from reduced-form models, for example, single-equation models for estimating the contribution of environmental regulation to productivity. This paper follows a structural approach that allows testing what is known in the literature as the ‘weak’ and the ‘strong’ version of the PH. Our ‘Green Innovation’ model includes three types of eco-investments to explain differences in the incidence of two types of eco-innovation, which are allowed to affect labor productivity. We allow for complementarity between the two types of eco-innovations. Using a comprehensive panel of Dutch manufacturing firm-level data we estimate the relative importance of environmental regulations on eco-investment and eco-innovations. The results of our analysis show a strong corroboration of the weak and a nuanced corroboration of the strong version of the PH.

Suggested Citation

  • George van Leeuwen & Pierre Mohnen, 2017. "Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 63-77, February.
  • Handle: RePEc:taf:ecinnt:v:26:y:2017:i:1-2:p:63-77
    DOI: 10.1080/10438599.2016.1202521
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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. Vivek Ghosal & Andreas Stephan & Jan F. Weiss, 2018. "Decentralized Environmental Regulations and Plant-Level Productivity," CESifo Working Paper Series 7255, CESifo Group Munich.
    3. Giovanni Marin & Francesca Lotti, 2017. "Productivity effects of eco-innovations using data on eco-patents," Industrial and Corporate Change, Oxford University Press, vol. 26(1), pages 125-148.
    4. Davide Antonioli & Simone Borghesi & Massimiliano Mazzanti, 2014. "Are Regional Systems Greening the Economy? the Role of Environmental Innovations and Agglomeration Forces," Working Papers 2014.42, Fondazione Eni Enrico Mattei.
    5. repec:nbr:nberch:13894 is not listed on IDEAS
    6. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    7. repec:eee:respol:v:48:y:2019:i:3:p:546-555 is not listed on IDEAS
    8. repec:wfo:wstudy:47155 is not listed on IDEAS
    9. Marius Ley, Tobias Stucki, and Martin Woerter, 2016. "The Impact of Energy Prices on Green Innovation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    10. Pierre Mohnen & Michael Polder & George van Leeuwen, 2017. "ICT, R&D, and Organizational Innovation: Exploring Complementarities in Investment and Production," NBER Chapters,in: Measuring and Accounting for Innovation in the 21st Century National Bureau of Economic Research, Inc.
    11. Amable, Bruno & Ledezma, Ivan & Robin, Stéphane, 2016. "Product market regulation, innovation, and productivity," Research Policy, Elsevier, vol. 45(10), pages 2087-2104.
    12. Sandra M. Leitner, 2018. "Eco-Innovation: Drivers, Barriers and Effects – A European Perspective," wiiw Working Papers 159, The Vienna Institute for International Economic Studies, wiiw.
    13. repec:eee:tefoso:v:144:y:2019:i:c:p:148-156 is not listed on IDEAS
    14. Lööf, Hans & Andreas, Andreas & Wulandari, Febi, 2018. "New ventures in Cleantech: opportunities, capabilities and innovation outcomes," Working Paper Series in Economics and Institutions of Innovation 467, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    15. Georg Licht & Bettina Peters & Christian Köhler & Franz Schwiebacher, 2014. "The Potential Contribution of Innovation Systems to Socio-Ecological Transition," WWWforEurope Deliverables series 4, WWWforEurope.
    16. Kunapatarawong, Rasi & Martínez-Ros, Ester, 2016. "Towards green growth: How does green innovation affect employment?," Research Policy, Elsevier, vol. 45(6), pages 1218-1232.
    17. repec:eee:respol:v:47:y:2018:i:9:p:1853-1867 is not listed on IDEAS
    18. Spyros Arvanitis & Michael Peneder & Christian Rammer & Tobias Stucki & Martin Wörter, 2016. "Competitiveness and ecological impacts of green energy technologies: firm-level evidence for the DACH region," KOF Working papers 16-420, KOF Swiss Economic Institute, ETH Zurich.
    19. Spyros Arvanitis & Michael Peneder & Christian Rammer & Tobias Stucki & Martin Wörter, 2016. "Development and Utilization of Energy-related Technologies, Economic Performance and the Role of Policy Instruments," KOF Working papers 16-419, KOF Swiss Economic Institute, ETH Zurich.
    20. Antonietti, Roberto & Marzucchi, Alberto, 2014. "Green tangible investment strategies and export performance: A firm-level investigation," Ecological Economics, Elsevier, vol. 108(C), pages 150-161.
    21. repec:wfo:wstudy:47502 is not listed on IDEAS
    22. Horbach, Jens, 2016. "The impact of resource efficiency measures on performance in small and medium-sized enterprises," Ruhr Economic Papers 643, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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