Going Green: Environmental Regulation, eco-innovation and technological alliances

The literature on the determinants of green technologies (GTs) has already identified regulation as a key driver of environmental innovations. However, relatively little is known on how the regulatory framework affect the knowledge generation process. This paper contributes this literature by investigating the impact of collaboration networks and environmental regulation, and of their interaction, on the generation of green technologies. The empirical analysis is carried out on a newly constructed dataset of European firms over the period 2005-2012 and it is articulated in two steps. Firstly, we test the existence of a relationship between the environmental regulation, as measured by the OECD Environmental Policy Stringency index, and GTs, proxied by patent applications. We then employ a dynamic network analysis model to explore the dual role of GTs both as determinant of the collaboration network and as outcome of firm collaboration strategies. We find that, even though there exists a strong and positive relationship, the regulatory framework has not a direct effect on GTs but rather it stimulates firms to search for new qualified collaboration. Then, it is the nature and the structure of these collaborations that encourages firms to generate new green technological knowledge.