Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out?

Hanna Hottenrott and Sascha Rexh�user

Industry and Innovation, 2015, vol. 22, issue 5, 375-401

Abstract: Substantial policy effort is devoted to stimulate environmentally friendly technology through regulation and subsidies. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts in affected firms may increase the cost of regulation. We study the effects of regulation-induced environmental technology on innovation activities for a sample of firms in Germany. We find some evidence for a crowding out of firms' in-house R&D, especially for firms facing financing constraints. Innovation outcomes and investments in innovation-related fixed assets are not affected. Moreover, subsidy-backed environmental technology does not crowd out R&D.

Date: 2015
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Citations: View citations in EconPapers (28)

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Related works:
Working Paper: Policy-induced environmental technology and inventive efforts: Is there a crowding out? (2013)
Working Paper: Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out? (2013)
Working Paper: Policy-induced environmental technology and incentive efforts: Is there a crowding out? (2013)
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DOI: 10.1080/13662716.2015.1064255

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