1. ENVIRONMENTAL REGULATION AND INNOVATION: A PANEL DATA STUDY.
- Author
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Jaffe, Adam B. and Palmer, Jaren
- Subjects
AMERICAN business enterprises ,ENVIRONMENTAL policy & economics ,BUSINESS enterprises & the environment ,ENVIRONMENTAL regulations ,COMPETITION ,MANUFACTURING industries ,RESEARCH - Abstract
In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors by stimulating domestic innovation. We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries. We find that lagged environmental compliance expenditures have a significant positive effect on R&D expenditures when we control for unobserved industry-specific effects. We find little evidence, however, that industries' inventive output (as measured by successful patent applications) is related to compliance costs. [ABSTRACT FROM AUTHOR]
- Published
- 1997
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