Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192736 
Year of Publication: 
2013
Series/Report no.: 
Discussion Papers No. 754
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper provides new evidence on the role of non-market based ("command-and-control") regulations in relation to innovations in environmental technologies. While pricing is generally considered the first-best policy instrument, non-market regulations, such as technology standards and non-tradable emission quotas, are common when a regulator faces multiple emission types and targets, heterogeneous recipients, or uncertainty with regard to marginal damages. Knowing whether these regulations spur or hinder innovation is of great importance to environmental policy. Using a unique Norwegian panel data set that includes information about the type and number of patent applications, technology standards, non-tradable emission quotas, and a large number of control variables for almost all large and medium-sized Norwegian incorporated firms, we are able to conduct a comprehensive study of the effect of non-market based regulations on environmental patenting. Unlike previous studies that are typically conducted at the industry level, we are able to take firm heterogeneiry into account, and thereby reduce the common problem of omitted variable bias in our analysis. We empirically identify strong and significant effects on innovations from implicit regulatory costs associated with the threat that a firm will be sanctioned for violating an emission permit.
Subjects: 
Command-and-control regulations
Technology standards
Non-tradable emission quotas
Patents
Innovation
Environmental technologies
Random effects ordered probit model.
JEL: 
C23
O34
Q52
Q53
Q55
Q58
Document Type: 
Working Paper

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