Technological Capacity and Environmental Performance: A Research Note Using Country Level Data

Abstract

This research note examines, at the macro level, the impact of corporations' technology capacity on environmental performance. Technology capacity is loosely defined as the ability of corporations in a country to acquire or develop new technologies. Building on the IPAT equation from industrial ecology, this note proposes that technological capacity is the main channel for environmental performance improvement emerging from corporations. The analysis reveals that generally, technological capacity is linked with aggregate performance indicators and more particularly with higher degree of eco-efficiency. However, it appears that when looking at the absolute value of ecological stress, technological capacity is detrimental.