Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88628
Authors: 
Hottenrott, Hanna
Rexhäuser, Sascha
Year of Publication: 
2013
Series/Report no.: 
DICE Discussion Paper 128
Abstract: 
Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmentally- friendly technology. Sceptics worry about the effects of regulation-induced environmental technology on firms' competitiveness. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts could increase the cost of mitigating environmental damage. Using matching techniques, we study the short-term effects of regulation-induced environmental technology on non-green innovative activities for a sample of firms in Germany. We find indeed some evidence for a crowding out of the firms' in-house R&D. The estimated treatment effect is larger for firms that are likely to face financing constraints. However, we do not find negative effects on the number of ongoing R&D projects, investments in innovation-related fixed assets or on the outcome of innovation projects. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found.
Subjects: 
Environmental Policy
Regulation
R&D
Technological Change
Innovation
Crowding Out
JEL: 
O32
O33
Q55
ISBN: 
978-3-86304-127-4
Document Type: 
Working Paper

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