Policy-induced environmental technology and inventive efforts: Is there a crowding out?
Hanna Hottenrott () and
No 128, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmentally- friendly technology. Sceptics worry about the effects of regulation-induced environmental technology on firms' competitiveness. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts could increase the cost of mitigating environmental damage. Using matching techniques, we study the short-term effects of regulation-induced environmental technology on non-green innovative activities for a sample of firms in Germany. We find indeed some evidence for a crowding out of the firms' in-house R&D. The estimated treatment effect is larger for firms that are likely to face financing constraints. However, we do not find negative effects on the number of ongoing R&D projects, investments in innovation-related fixed assets or on the outcome of innovation projects. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found.
Keywords: Environmental Policy; Regulation; R&D; Technological Change; Innovation; Crowding Out (search for similar items in EconPapers)
JEL-codes: O32 O33 Q55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env, nep-ino, nep-ppm, nep-res, nep-sbm and nep-tid
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Journal Article: Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out? (2015)
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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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:128
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