Environmental investments and firms' productivity: a closer look

Roberto Antonietti and Alberto Marzucchi

No 114, SEEDS Working Papers from SEEDS, Sustainability Environmental Economics and Dynamics Studies

Abstract: In this paper we investigate the relationship between investments in environmentally-oriented equipment and firms' productivity. Drawing on Porter hypothesis, we estimate the impact of capital-embodied environmental innovations on the level of firm productive efficiency (TFP), distinguishing between investments aimed at reducing the environmental impact of production (Target 1) and investments aimed at reducing the use of raw materials (Target 2). Relying on a rich firm-level dataset on Italian manufacturing, and using a quantile regression approach, we show that Target 1 investments enhance the TFP level of low-performing firms, whereas the productivity effect of Target 2 investments concerns medium-high performing firms. When interacted, the two targets show an additive positive short-term effect on productivity for medium-low, medium and medium-high performing firms. This effect partially vanishes through time.

Keywords: environmental investment; TFP; quantile regression (search for similar items in EconPapers)
JEL-codes: O33 Q55 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-12, Revised 2014-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/0114.pdf First version, 2014 (application/pdf)
http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/0114.pdf Revised version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:srt:wpaper:0114

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