Environmental Policies, Innovation and Productivity in EU

Roberta de Santis () and Cecilia Jona Lasinio ()
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Cecilia Jona Lasinio: ISTAT
Authors registered in the RePEc Author Service: Cecilia Jona-Lasinio

No 15122, Working Papers LuissLab from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: In a globalized framework, environmental regulations can have a decisive role in influencing countries’ comparative advantages. The conventional perception about environmental protection is that it imposes additional costs on firms, which may reduce their global competitiveness with negative effects on growth and employment. However, some economists, in particular Porter and Van der Linde (1995), argue that pollution is often associated with a waste of resources and that more stringent environmental policies can stimulate innovations that may over-compensate for the costs of complying with these policies. This is known as the Porter hypothesis and suggests the existence of a “double dividend”, for both economic and environmental aspects, related to environmental regulation. In this paper, we adopt a macroeconomic approach to investigate the impact of different environmental instruments on the economy as a whole. We investigate the environmental policy impacts on a sample of European economies in 1995-2008. Our findings suggest that the “narrow” Porter Hypothesis cannot be rejected and that the choice of the policy instruments is not neutral. In particular, market based environmental stringency measures look as the most effective to stimulate innovations and productivity.

Keywords: environmental regulation; productivity; innovation; Porter hypothesis. (search for similar items in EconPapers)
JEL-codes: D24 O31 O47 Q50 Q55 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ene, nep-env, nep-ino, nep-reg and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Environmental Policies, Innovation and Productivity in the EU (2016)
Journal Article: Environmental Policies, Innovation and Productivity in the EU (2016)
Working Paper: Environmental Policies, Innovation and Productivity in the EU (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lui:lleewp:15122

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