Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands

George Leeuwen and Pierre Mohnen

Economics of Innovation and New Technology, 2017, vol. 26, issue 1-2, 63-77

Abstract: Almost all empirical research that has attempted to assess the validity of the Porter hypothesis (PH) has started from reduced-form models, for example, single-equation models for estimating the contribution of environmental regulation to productivity. This paper follows a structural approach that allows testing what is known in the literature as the ‘weak’ and the ‘strong’ version of the PH. Our ‘Green Innovation’ model includes three types of eco-investments to explain differences in the incidence of two types of eco-innovation, which are allowed to affect labor productivity. We allow for complementarity between the two types of eco-innovations. Using a comprehensive panel of Dutch manufacturing firm-level data we estimate the relative importance of environmental regulations on eco-investment and eco-innovations. The results of our analysis show a strong corroboration of the weak and a nuanced corroboration of the strong version of the PH.

Date: 2017
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Working Paper: Revisiting the Porter Hypothesis: An Empirical Analysis of Green Innovation for the Netherlands (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:26:y:2017:i:1-2:p:63-77

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DOI: 10.1080/10438599.2016.1202521

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