Environmental Innovations and Firm Profitability: Unmasking the Porter Hypothesis

Linking forms of inbound open innovation to a driver-based typology of environmental innovation: Evidence from French manufacturing firms

“…Therefore, we conceptually distinguish compliance and voluntary drivers of EI. This distinction also appears in a previous empirical study of the link between EI and firm profitability (Rexhäuser and Rammer, 2014).…”

“…Prior studies also show that firm profitability improves when its own resource efficiency increases, due to EI (Eiadat et al, 2008). Applying the Porter hypothesis, Rexhäuser and Rammer (2014) even suggest that it may be necessary to increase an innovating firm's own resource efficiency first, regardless of its motives for EI.…”

Environmental Regulation and Sustainable Competitiveness: Evaluating the Role of Firm-Level Green Investments in the Context of the Porter Hypothesis

“…Since we investigate the impact of a change in a specific regulation using a difference-in-differences approach, we can abstract from using an approach where the production function has to be explicitly modeled. A third paper by Rexhäuser & Rammer (2014) addresses the effect of different types of innovations on firm performance (profits) by using data from an innovation survey for German firms that includes detailed information on firm characteristics. The authors find that only those innovations that increase resource efficiency (material or energy consumption per unit of output) have positive returns to profitability.…”

The Effects of Locational Factors on the Performance of Innovation Networks in the German Energy Sector

“…The introduction of so-called 'Renewable Energy Feed-in Tariff' systems that reward the generation of renewable energy by the government has increased competition and in consequence offered "opportunities for small market players against monopolistic practices" [70] (p. 685). Competitive firms need to be able to develop technologies (core technology capability, see, e.g., [69]) and to quickly adopt new technologies (absorptive capacity), e.g., to become more resource-efficient and to increase profitability [71]. These capacities enable firms and collaborations to act innovatively in a highly competitive environment.…”