Unmasking the Porter hypothesis: Environmental innovations and firm-profitability

We examine impacts of different types of environmental innovations on firm profits. Following Porter's (1991) hypothesis that environmental regulation can improve firms' competitiveness we distinguish regulation induced and voluntary environmental innovations. We find that innovations which reduce environmental externalities reduce firms' profits, as long as they are induced by regulations. However, innovation that increases a firm's material or energy efficiency in terms of material or energy consumption has a positive impact on profitability. This positive result holds both for regulation induced and voluntary innovations, although the effect is significantly larger for regulation-driven innovation.We conclude that the Porter hypothesis does not hold in general for its 'strong' version but has to be qualified by the type of environmental innovation. Our finding rest on firm level data from the German part of the Community Innovation Survey in 2009. --Environmental innovation,environmental regulation,Porter hypothesis,competitiveness

Good enough! Are socially responsible companies the more successful environmental innovators?

The link between Corporate Social Responsibility (CSR) activities and financial performance of firms has been intensively examined and debated in academics and politics, but the connection to innovation has so far lacked research attention. This paper investigates whether CSR is complementary to environmental innovations, so that a joint introduction of both strategies generates a higher financial performance than the application of one or none of the strategies. We analyse if environmental innovators can generate higher financial performance by signalling their environmental engagement through CSR. For this purpose, we use panel data of environmental R&D activity together with a CSR variable on the Global Reporting Initiative (GRI) and analyse their effect on the financial performance of a firm. The novelty of our work is the complementary approach with which we examine the effect of a joint strategy of environmental R&D and CSR on financial performance. Although our results support the view of strategic complements for environmental R&D and GRI, we cannot conclude that this is also true for other types of CSR signalling environmental engagement

Unmasking the Porter hypothesis : environmental innovations and firm-profitability

We examine impacts of different types of environmental innovations on firm profits. Following Porter’s (1991) hypothesis that environmental regulation can improve firms’ competitiveness we distinguish regulation induced and voluntary environmental innovations. We find that innovations which reduce environmental externalities reduce firms’ profits, as long as they are induced by regulations. However, innovation that increases a firm’s material or energy efficiency in terms of material or energy consumption has a positive impact on profitability. This positive result holds both for regulation induced and voluntary innovations, although the effect is significantly larger for regulation-driven innovation.We conclude that the Porter hypothesis does not hold in general for its “strong” version but has to be qualified by the type of environmental innovation. Our finding rest on firm level data from the German part of the Community Innovation Survey in 2009

Trade and the environment: an application of the WIOD database

The new WIOD database allows for improved empirical analysis on a wide range of important environmental research questions. In this paper we demonstrate the scientific power of the WIOD database and analyze very urgent policy questions on the impacts of international trade and structural change on the environment. We apply recent econometric approaches to show the impact of international trade on the environment via its different channels as for instance to increase welfare and potentially affects environmental regulation as well as countries’ sector. This approach has become known as the econometric structural decomposition method. In addition to this guidelines by the literature, an econometric panel data approach is offered to shed some light on the impact of structural change and international trade on environmental pressure, where we especially address and solve several endogeneity issues that add further complexity to the analysis

From less promising to green? : technological opportunities and their role in (green) ICT innovation

This paper aims to shed light on the role of technological opportunities for green innovation by studying the case of Green ICT innovation. We test two hypotheses: (1) Firms active in low-opportunity technological areas are less innovative; (2) Firms active in low-opportunity technological areas are more likely to change their direction of technical change. To do so, we construct a firm-level panel data set for the years 1992-2009 combining patent data from the European Patent Office with firm-level data from the German Innovation Panel (Mannheim Innovation Panel). The results are based on dynamic count data estimation models applying General Methods of Moments estimators. Our results support our hypotheses: firms active in low-opportunity technological areas are less innovative but are more likely to switch from pure ICT innovation to Green ICT innovation

ICT and the demand for energy : evidence from OECD countries

This paper analyzes the relationship between information and communication technology (ICT) and energy demand. We construct a comprehensive cross-country cross-industry panel data set covering 13 years, 10 OECD countries, and 27 industries. Using up to 2889 country-industry observations, we find that: (1) ICT capital is associated with a significant reduction in energy demand. (2) This relationship differs with regard to different types of energy. ICT use is not significantly correlated with electricity demand, but is significantly related to a reduction in non-electric energy demand. That is, ICT use comes with a reduction in total energy demand and an increase in the relative demand for electric over non-electric energy

Climate-related innovations, crowding out, and their impact on competitiveness

Wachsende Umweltbelange haben in den letzten Jahrzehnten den Druck auf politische Entscheidungsträger erhöht, Maßnahmen zur Verhinderung weiterer ökologischer Schäden zu ergreifen. Doch obwohl Treibhausgasemissionen und der verschwenderische Umgang mit natürlichen Ressourcen schädlich für die Umwelt sind, zögert die Politik, umweltfreundliche Gesetze zu implementieren, von denen Nachteile für die nationale Wettbewerbsfähigkeit befürchtet werden. Viele sehen daher die Lösung in der Entwicklung umweltfreundlicher Technologien, die ökologische Probleme lindern könnten, ohne die Wettbewerbsfähigkeit zu beeinträchtigen. Der Einfluss von Innovationen mit Umweltwirkung auf die Wettbewerbsfähigkeit ist Gegenstand dieser ZEW-Studie

Performance measure of eco-process innovation: insights from a literature review

Eco-process innovation has been recognised as one of the important strategies for mitigating the growing environmental challenges. Its concept has succeeded in drawing the interests of many scholars worldwide. The aim of this paper is to review the literature to clarify how one actually measure eco-process innovation performance. Critical analysis of literature has been performed in this study. Database searches were mainly relied to compile the literature. In relation to eco-process innovation assessment, results revealed that most prior works focused on the economic and environmental performance with the exclusion of social performance and very limited attempts done in analysing real operational data. It was identified that there is a need for empirical investigations on measuring the social performance of eco-process innovation along with the economic and environmental performance, and on development of operational measuring instrument as these study area have not been well explored

A Service of zbw Leibniz-Informationszentrum Wirtschaft Leibniz Information Centre for Economics Good Enough! Are Socially Responsible Companies the More Successful Environmental Innovators? Good Enough! Are Socially Responsible Companies the More Success

Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. http://ftp.zew.de/pub/zew-docs/dp/dp15018.pdf Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Terms of use: Documents in Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Good enough! Are Socially Responsible Companies the more Successful Environmental Innovators? Christiane Reif a and Sascha Rexhäuser b Abstract: The link between Corporate Social Responsibility (CSR) activities and financial performance of firms has been intensively examined and debated in academics and politics, but the connection to innovation has so far lacked research attention. This paper investigates whether CSR is complementary to environmental innovations, so that a joint introduction of both strategies generates a higher financial performance than the application of one or none of the strategies. We analyse if environmental innovators can generate higher financial performance by signalling their environmental engagement through CSR. For this purpose, we use panel data of environmental R&D activity together with a CSR variable on the Global Reporting Initiative (GRI) and analyse their effect on the financial performance of a firm. The novelty of our work is the complementary approach with which we examine the effect of a joint strategy of environmental R&D and CSR on financial performance. Although our results support the view of strategic complements for environmental R&D and GRI, we cannot conclude that this is also true for other types of CSR signalling environmental engagement