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Do R&D Spillovers Support Emission Abatement Targets?

Author

Listed:
  • Kuosmanen, Natalia
  • Kuosmanen, Timo

Abstract

This brief examines how R&D spillovers are associated with firm-level greenhouse gas emissions in Finnish energy-intensive manufacturing. The results show that R&D spillovers from other firms within the same industry are more strongly associated with lower emissions than the firm’s own R&D activity. This result highlights the role of innovation spillovers and knowledge diffusion in emissions abatement. However, the direction and magnitude of R&D spillovers differ across industries depending on their R&D intensity. In the chemical industry that has high R&D intensity, inter-industry R&D spillovers are associated with lower emissions, whereas in the pulp and paper and basic metals industries, inter-industry R&D spillovers are associated with higher emissions. These results demonstrate that technology spillovers do not automatically lower emissions, but can also contribute to higher emissions. Our findings reveal an important channel of inter-industry R&D spillovers through material flows, highlighting the pivotal role of the chemical industry for the GHG abatement in the pulp and paper production and non-metallic minerals industry.

Suggested Citation

  • Kuosmanen, Natalia & Kuosmanen, Timo, 2026. "Do R&D Spillovers Support Emission Abatement Targets?," ETLA Brief 175, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:175
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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