Environmental innovations and profitability: How does it pay to be green? An empirical analysis on the German innovation survey

Claudia Ghisetti () and Klaus Rennings

No 13-073, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Much of the empirical literature analysing the relation between environmental innovation and competitiveness has focused on the question whether 'it pays to be green'. We differentiate between different types of environmental innovations, which will be disentangled in those aiming at reducing the negative externalities and those allowing for efficiency increases and cost savings. What we analyze is at first the extent to which these two typologies have impacts on firms' profitability with opposite signs, and, secondly, whether the motivations driving the adoption of those innovations make the difference in terms of economic gains. We find empirical evidence that both the typology of Environmental Innovation and the driver of their adoption affect the sign of the relationship between competitiveness and environmental performance. The empirical strategy is based on a sample of German firms and makes use of a merge of two waves of the Mannheim Innovation Panel in 2011 and 2009 that allow overcoming some endogeneity issues which may arise in a cross-section setting.

Keywords: Profitability; Externality Reducing Innovations; Energy and Material Efficiency Innovations; Mannheim Innovation Panel (search for similar items in EconPapers)
JEL-codes: K32 M10 Q20 Q55 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-eff, nep-env, nep-ino, nep-knm and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13073

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