Can non-market regulations spur innovations in environmental technologies? A study on firm level patenting

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 754

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Intellectual Property and Intellectual Capital ; Pollution Control Adoption and Costs; Distributional Effects; Employment Effects ; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling ; Environmental Economics: Technological Innovation ; Environmental Economics: Government Policy
• Subject: Command-and-control regulations ; Technology standards ; Non-tradable emission quotas ; Patents ; Innovation ; Environmental technologies ; Random effects ordered probit model.

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Klemetsen, Marit E. ; Bye, Brita ; Raknerud, Arvid
• Event: Veröffentlichung
• (who): Statistics Norway, Research Department
• (where): Oslo
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/192736
• Last update: 10.03.2025, 11:42 AM CET