Does increasing environmental policy stringency lead to accelerated environmental innovation? A research note

Mahmoud Hassan () and Damien Rousselière
Additional contact information
Mahmoud Hassan: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université

Post-Print from HAL

Abstract: This research note empirically investigates the effect of stringent environmental regulations on environmentally friendly technological innovation for 27 OECD countries from 1990 to 2015, using the two-step system-GMM estimation method for a linear dynamic panel data model. We further test the robustness of the empirical results by the method of correlated random effects for dynamic panel data estimated by Maximum Likelihood, the fixed effect with Driscoll–Kraay standard errors and the mixed-effect maximum-likelihood estimator. Overall, we find that increasing environmental policy stringency leads to accelerated environmental innovation. In addition, the non-market-based environmental policy instruments are found to stimulate more environmental innovation than market -based instruments. Thus, the instruments based on command and control policies are more effective than price mechanisms in inducing eco-innovation.

Keywords: Environmental policy stringency; Environmental innovation; Two-step system-GMM estimation; Linear dynamic panel data model (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Published in Applied Economics, 2022, 54 (17), pp.1989-1998. ⟨10.1080/00036846.2021.1983146⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03420356

DOI: 10.1080/00036846.2021.1983146

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().