 Unintended consequences of punishment: Adverse effects of environmental penalties on green patentsGeorge Zhe Tian and James Yae Research in International Business and Finance, 2024, vol. 70, issue PA Abstract: We find that manufacturing firms that have received high environmental penalties experience significant declines in subsequent green patenting activity. We further use a difference-in-differences strategy exploiting the passage of 1990 Clean Air Act Amendment (1990 CAAA) as a shock to environmental regulatory stringency and show that the increase in regulatory stringency is linked to decreases in corporate green innovation. The adverse effect of environmental penalties on green innovation is stronger in firms with greater business uncertainty, higher product market competition, higher institutional ownership, and weaker financial conditions. Overall, the empirical evidence is consistent with the view that environmental penalties prompt firms to manage their risk exposure by reducing green innovation activity. Keywords: Green innovation; Environmental penalties; Environmental regulatory risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924000746 DOI: 10.1016/j.ribaf.2024.102281 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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