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

Hanna Hottenrott () and Sascha Rexhäuser

Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmental-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 propensity score matching, 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 R&D and total innovation expenditures net of those costs due to the environmental innovation. The estimated treatment effect is larger for firms that are likely to face financing constraints. No significant effects are observed for the number of R&D projects and investments in non-innovation-related assets. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found.

JEL-codes: O33 O31 Q55 (search for similar items in EconPapers)
Date: 2013
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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Citations: View citations in EconPapers (3) Track citations by RSS feed

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Related works:
Journal Article: Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out? (2015) Downloads
Working Paper: Policy-induced environmental technology and inventive efforts: Is there a crowding out? (2013) Downloads
Working Paper: Policy-induced environmental technology and incentive efforts: Is there a crowding out? (2013) Downloads
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