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Environmental investments and firms' productivity: a closer look

Author

Listed:
  • Roberto Antonietti

    (Department of Economics and Management 'Marco Fanno', University of Padova (Italy).)

  • Alberto Marzucchi

    (Department of International Economics, Institutions and Development (DISEIS), Catholic University of Milan (Italy) and INGENIO (CSIC-UPV), Valencia (Spain).)

Abstract

In this paper we investigate the relationship between investments in environmentally-oriented equipment and firms' productivity. Drawing on Porter hypothesis, we estimate the impact of capital-embodied environmental innovations on the level of firm productive efficiency (TFP), distinguishing between investments aimed at reducing the environmental impact of production (Target 1) and investments aimed at reducing the use of raw materials (Target 2). Relying on a rich firm-level dataset on Italian manufacturing, and using a quantile regression approach, we show that Target 1 investments enhance the TFP level of low-performing firms, whereas the productivity effect of Target 2 investments concerns medium-high performing firms. When interacted, the two targets show an additive positive short-term effect on productivity for medium-low, medium and medium-high performing firms. This effect partially vanishes through time.

Suggested Citation

  • Roberto Antonietti & Alberto Marzucchi, 2013. "Environmental investments and firms' productivity: a closer look," SEEDS Working Papers 0114, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2014.
    • Handle: RePEc:srt:wpaper:0114
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    environmental investment; TFP; quantile regression;
    All these keywords.

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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