Environmental policy and induced technological change in European industries

Abstract

The study provides an empirical analysis of the effects of environmental policy on technological innovation in a specific field of environmental technologies. The econometric analysis is based on information on innovation activities deriving from various Community Innovation Survey waves and information on environmental accounts (NAMEA) for a large set of European industries. The empirical results show the existence of a robust enhancing effect played by environmental policy with respect to energy and resource efficiency innovations. In addition, the introduction of energy and resource efficiency technologies is found to be positively associated with innovative investment and to be strictly related to improved product quality. These results proved to be robust to the use of alternative proxies of the stringency of environmental policy and to the introduction of different control variables in different model specifications.