What are the determinants of investment in environmental R&D?

Abstract

To face the challenges posed by climate change, environmental R&D and innovation are critical factors if we hope to cut emissions; yet, investment in environmental R&D remains below the social optimum. The aim of this paper is to analyse the determinants of investment in environmental innovation and to detect the differences, if any, with the determinants of investment in general innovation. In addition, this paper examines the relationship between environmental innovation R&D expenditure and a range of policy instruments, including environmental regulation and other policy measures including R&D subsidies and environmental taxes. The empirical analysis is carried out for 22 manufacturing sectors in Spain for the period [2008][2009][2010][2011][2012][2013]. To overcome problems of data availability, we construct a comprehensive database from different surveys. The main implications from our results are 1). Managerial strategy appears as a relevant driver of environmental R&D investments.2) The establishment of a policy mix between environmental, energy and technological regulatory measures is recommended.3) The promotion of self-regulation through actions that encourage companies to follow a policy that affects their energy efficiency and is environmentally friendly.

Sustainability‐oriented capabilities for eco‐innovation: Meeting the regulatory, technology, and market demands

“…Majority of the EI literature finds that firms' generic R&D investments (Costantini, Crespi, Martini, & Pennacchio, ; Ghisetti & Pontoni, ; Horbach, ; Jové‐Llopis & Segarra‐Blasco, ) and the R&D investments specifically dedicated to environmental technologies (i.e., eco‐R&D; Costa‐Campi, Garcia‐Quevedo, & Martínez‐Ros, ; Demirel & Kesidou, ; K. H. Lee & Min, ; Melander, ) positively affect their ability to introduce EI. Generic R&D and eco‐R&D can be framed in the context of local versus distant search, whereby the former refers to R&D activities that are closely related to the core business of the firm while the latter refers to the more outward‐looking “exploration” activities (March & Simon, ).…”

Impact of Environmental Investment on Financial Performance: Evidence from Chinese listed Companies

“…Some scholars who challenge this trade-off relationship pointed out that strengthening environmental investment is positively related to financial performance. On the one hand, this is because environmental expenditure can be considered an investment in innovative new technology that reduces pollution abatement costs, thus improving firm performance [29][30][31]. On the other hand, from the income perspective, McGuire et al [32] has suggested that environmental management behavior can establish a good corporate image and gain consumer loyalty, which indirectly improves company revenue.…”

The role of environmental innovation through the technological proximity in the implementation of the sustainable development

“…Although empirical evidence is increasingly focused on more sustainable development (Costa-Campi, Garcia-Quevedo, & Martìnez-Ros, 2017;Rennings, 2000), green innovations are still relatively unknown to firms. Furthermore, the analysis of knowledge sources for green innovation is yet unexplored (Ghisetti et al, 2015;Horbach et al, 2013;Marzucchi & Montresor, 2017).…”