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Environmental and innovation performance in a dynamic impure public good framework

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  • Massimiliano Corradini
  • Valeria Costantini
  • Susanna Mancinelli
  • Massimiliano Mazzanti

    ()

Abstract

We model investment decisions regarding innovation and emissions abatement in a dynamic theoretical framework, where knowledge stock is considered as an impure public good. The reaction function between one representative agent’s investments in innovation and the other agents’ investments in the public characteristic of the impure public good has positive slope under general conditions and that its sensitiveness is affected by assumptions on the elasticity of substitution in the benefit function as well as on the degree of complementarity between the private and the public characteristic. The positivity of the reaction function is then empirically tested in an econometric estimation. We exploit an original database by gathering innovation efforts as well as emissions over the period 1996-2006 for 15 European countries and 23 manufacturing sectors. Empirical results show that innovation investment is positively driven by the public characteristics provided by other sectors, with different reactivity strength for different polluting emissions.

Suggested Citation

  • Massimiliano Corradini & Valeria Costantini & Susanna Mancinelli & Massimiliano Mazzanti, 2011. "Environmental and innovation performance in a dynamic impure public good framework," Departmental Working Papers of Economics - University 'Roma Tre' 0141, Department of Economics - University Roma Tre.
  • Handle: RePEc:rtr:wpaper:0141
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    Cited by:

    1. Ghisetti, Claudia & Marzucchi, Alberto & Montresor, Sandro, 2015. "The open eco-innovation mode. An empirical investigation of eleven European countries," Research Policy, Elsevier, vol. 44(5), pages 1080-1093.
    2. Michael Finus & Dirk Rübbelke, 2013. "Public Good Provision and Ancillary Benefits: The Case of Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 211-226, October.

    More about this item

    Keywords

    impure public goods; environmental externalities; innovation spillovers;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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