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Resource Efficiency, Environmental Policy and Eco-Innovations for a Circular Economy: Evidence from EU Firms

Author

Listed:
  • Giulio Cainelli

    () (University of Padova & SEEDS)

  • Alessio D’Amato

    (University of Tor Vergata Rome & SEEDS)

  • Massimiliano Mazzanti

    (University of Ferrara, IEFE Bocconi Milan & SEEDS)

Abstract

Innovation adoption and diffusion by firms are key pillars for the EU strategy on resource-efficiency and the development of a circular economy. This paper presents new EU evidence regarding the role of environmental policy and green demand drivers to sustain the adoption of resource efficiency-oriented eco-innovations. This paper originally implements new estimators to address the endogeneity of binary framed policy and demand covariates, which typically characterise firm level survey data. Our results suggest that when endogeneity is accounted for, environmental policy is the only factor always significant in driving the adoption of innovations that reduce the use of waste and material, while demand-side and market-factors do not always play a central role. The result is an important piece of new quantitative-based knowledge, which complements the currently large case study-based evidence on the setting of sound management and policy strategies for the circular economy.

Suggested Citation

  • Giulio Cainelli & Alessio D’Amato & Massimiliano Mazzanti, 2017. "Resource Efficiency, Environmental Policy and Eco-Innovations for a Circular Economy: Evidence from EU Firms," SPRU Working Paper Series 2017-24, SPRU - Science Policy Research Unit, University of Sussex Business School.
  • Handle: RePEc:sru:ssewps:2017-24
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    File URL: https://www.sussex.ac.uk/webteam/gateway/file.php?name=2017-24-swps-cainelli-et-al.pdf&site=25
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    References listed on IDEAS

    as
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    2. Managi, Shunsuke & Hibiki, Akira & Shimane, Tetsuya, 2014. "Efficiency or technology adoption: A case study in waste-treatment technology," Resource and Energy Economics, Elsevier, vol. 36(2), pages 586-600.
    3. Cainelli, Giulio & D’Amato, Alessio & Mazzanti, Massimiliano, 2015. "Adoption of waste-reducing technology in manufacturing: Regional factors and policy issues," Resource and Energy Economics, Elsevier, vol. 39(C), pages 53-67.
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    Keywords

    Eco innovation; circular economy; innovation drivers; EU; environmental regulation; market demand;

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