Environmental regulations, innovation and firm performance: A revisit of the Porter hypothesis

Ramanathan, Ramakrishnan; He, Qi; Black, Andrew P.; Ghobadian, Abby; Gallear, David

doi:10.1016/j.jclepro.2016.08.116

Cited by 395 publications

(257 citation statements)

References 66 publications

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“…This is consistent with the objective of environmental policies, which aim to increase an industry's ratio of clean‐to‐polluted production systems and improve general consumption (Dröge & Schröder, ). Furthermore, the adoption of green process innovation can help firms enhance their environmental performance and reap the benefits of sustainability and profitability (Hojnik & Ruzzier, ; Huang & Li, ; Ramanathan, He, Black, Ghobadian, & Gallear, ). Therefore, green process innovation is likely to lead to a “win‐win” situation in terms of business performance and social perception (Ghisetti & Rennings, ; Zailani et al, ), playing an important role in maintaining a firm's green image (Chen, ).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Turning green subsidies into sustainability: How green process innovation improves firms' green image

2019

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Green process innovation has been seen as a key strategy for manufacturing firms to pursue sustainable development. Yet, how to help manufacturing firms eliminate bottlenecks when implementing green process innovation remains poorly understood. To address this issue, the current study, which is anchored in the government incentive perspective, examines the drivers, contingent conditions, and consequences of green process innovation by using the panel data of manufacturing‐listed firms in China from 2013 to 2017. The results present valuable findings: (a) green subsidies are positively related to two dimensions of green process innovation, namely, cleaner production technology and end‐of‐pipe technology; (b) both cleaner production technology and end‐of‐pipe technology are positively related to firms' green image; (c) a firm's cleaner production technology mediates the relationship between green subsidies and its green image; and (d) higher absorptive capacity strengthens the indirect effect of green subsidies on a firm's green image via cleaner production technology. Our results provide meaningful theoretical and practical implications by revealing the benefits of green subsidies through green process innovation by leveraging levels of absorptive capacity.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Turning green subsidies into sustainability: How green process innovation improves firms' green image

2019

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“…A good institutional environment can promote entrepreneurship [29]. Based on the Porter [30] Hypothesis, Ramanathan et al [31] suggest that flexible environmental regulations that encourage enterprises to innovate can drive enterprises to dynamic innovation and have a positive impact on their performance and sustainability. For green entrepreneurship, policy support can also provide momentum.…”

Section: Mechanism Analysis On Green Entrepreneurship Guided By Policmentioning

confidence: 99%

“Green Ocean Treasure Hunting” Guided by Policy Support in a Transitional Economy

Sheng

Gao

et al. 2018

Sustainability

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For countries in the process of economic transition, improvement of industrialization is no longer the sole goal of their economic development. While upgrading the level of industrial development, these countries also gradually attach importance to resource utilization efficiency and environmental protection, which is why green entrepreneurship has become increasingly popular in recent years. With the intensification of policy guidance, a new "sea area" named green entrepreneurship ushers in more and more "treasure hunters" exploring "the treasure" therein. Based on this, this paper constructs the model of "Green Ocean Treasure Hunting" for green entrepreneurial enterprises to analyze the role played by their government's relevant policies and puts forward the research proposition of this article based on the relevant literature. On this basis, this paper chooses and analyzes a medium-sized, high-tech enterprise in China which follows a certain typical green entrepreneurial process as evidence of the propositions we have put forward.

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“…Based on the Porter hypothesis, the "compensation effect" and "learning effect" of environmental regulation will promote green technology innovation [51]. However, the development of the industry bears high environmental costs, and environmental regulation may also be inversely proportional to green innovation growth [48,52,53]. We use investment in the treatment of environmental pollution by industry as a proxy for environmental regulation (REG).…”

Section: Dynamic Panel Threshold Modelmentioning

confidence: 99%

External Knowledge Sourcing and Green Innovation Growth with Environmental and Energy Regulations: Evidence from Manufacturing in China

Hou

Chen

2017

Sustainability

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This paper adopts the slacks-based measure-directional distance function (SBM-DDF, 2009) method for deriving the "Green Innovation Growth" rates of 28 manufacturing industries in China. The results indicate that the overall level of green innovation growth in China's manufacturing is relatively low, with a declining trend. The tradeoffs among energy, environment and economy are rather sharp, and the "Porter Effect (1995)" (environmental regulation will promote green technology innovation) is not currently realized quickly in manufacturing. These evaluations imply an unsustainable development model in China, with significant differences among industries. By using a dynamic panel threshold model and employing an industry-level panel dataset for 2008-2014, we show that external knowledge sourcing has a significant negative impact on green innovation growth but with different constraints on R&D levels among industries. With the strengthening of R&D levels, gradually surpassing "critical mass", the negative role of external knowledge sourcing in driving this mechanism becomes smaller and smaller; it has a non-linear relationship with the "threshold effect". Consequently, we provide insights into the relationship among energy consumption, environmental pollution and technology innovation, and show how the heterogeneity of the R&D threshold affects differences in external knowledge sourcing and green innovation growth. These insights lead to a better understanding of the driving force, realizing path and policy design for green innovation growth.

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Environmental regulations, innovation and firm performance: A revisit of the Porter hypothesis

Cited by 395 publications

References 66 publications

Turning green subsidies into sustainability: How green process innovation improves firms' green image

Turning green subsidies into sustainability: How green process innovation improves firms' green image

“Green Ocean Treasure Hunting” Guided by Policy Support in a Transitional Economy

External Knowledge Sourcing and Green Innovation Growth with Environmental and Energy Regulations: Evidence from Manufacturing in China

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