A STUDY ON ECO-INNOVATION AND ITS DETERMINANTS

Year 2016, , 148 - 155, 30.03.2016

Billur Engin Balin , H. Dilara Mumcu Akan

https://doi.org/10.17261/Pressacademia.2016116658

Abstract

Environmental problems and the
solutions investigated within the economic theory has been high on the global
agenda since 70s. Variables that encourage firms to innovate and/or use
environment-friendly technologies is an important subtitle in this issue.
According to the common definition in the environmental economics literature,
eco-innovation consists of new or modified processes, techniques, systems and
products to avoid or reduce environmental damage. Although there are a lot of
variables that determine the eco-innovation level of a firm, national and
international environmental policy –as one of them- worths significantly
noting. Under some conditions, the stringency of environmental regulations
induces firms to reduce their costs by innovating new environment-friendly
technologies. Therefore, environmental regulations may lead a so-called
“win-win” situation characterized by both cost reducing/profit maximizing
behaviour of the firm and environmental benefits. On the other hand,
international harmonization of environmental regulations may create a
comperative advantage for the eco-innovationg firms in the newly innovated
technologies and strengthen this “win-win” situation. Market structure,
technological capabilities, awareness and pressures of the demanders for
cleaner technology are the other variables which determine the eco-innovation
level of a firm. This study has concentrated on the variables that determine
eco-innovation level of a firm. Both endogenous and exogenous variables are
analysed in detail. As a consequence, it has been found that (1) the effect of
environmental regulations on eco-innovation should be emphasized diligently,
(2) international harmonization of environmental regulations supports
eco-innovation, and finally (3) increasing awareness of society about
environmental issues may be influent on ecoinnovation.  

Keywords

Environmental Innovation, Eco-innovation, Environmental Policy, Porter Hypothesis, European Union

References

• Baumol, W. J., (2002); The Free Market Innovation Machine – Analyzing the Growth Miracle of Capitalism, Princeton University Press, New Jersey.
• Beise, M. and Rennings, K., (2004); “Lead Markets and Regulation: A Framework for Analyzing the International Diffusion of Environmental Innovations”, Ecological Economics, Volume 52 (1), pp. 5-17.
• Biglaiser, G. and Horowitz, J. K., (1995); “Pollution Regulation and Incentives for Pollution-Control Research”, Journal of Economics and Management Strategy, Volume 3 (4), pp. 663-684.
• Brunnrmeier, S. B. and Cohen M. A. (2003); “Determinants of Environmental Innovation in US Manufacturing Industries”, Journal of Environmental Economics and Management, Volume 45, pp. 278-293.
• De Vries, F. P. and Withagen, C., (2005); “Innovation and Environmental Stringency: The Case of Sulphur Dioxide Abatement”, University of Tilburg Discussion Paper, No: 18, pp. 1- 33.
• Downing, P. B. and White, L. J., (1986); “Innovation in Pollution Control”, Journal of Environmental Economics and Management, Volume 8, pp. 225-271.
• European Commission, (2011) “Attitudes of European entrepreneurs towards eco-innovation: Analytical Report” (online at http://ec.europa.eu/public_opinion/flash/fl_315_en.pdf 07/03/2016)
• Faber, A. and Frenken, K., (2009); “Models in Evolutionary Economics and Environmental Policy: Towards an Evolutionary Environmental Economics”, Technological Forecasting and Social Change, Volume 76(4), pp. 462-470.
• Gatersleben,B. – Steg, L. and Vlek, C., (2002); “Measurement and Determinants of Environmentally Significant Consumer Behavior”, Environment and Behavior, Volume 34 (3), pp. 335-362.
• Geroski, P.A., (1990); “Innovation, Technological Opportunity, and Market Structure”, Oxford Economic Papers, Volume 42 (3), pp. 586602.
• Horbach, J., (2008); “Determinants of Environmental Innovation – New Evidence from German Panel Data Sources”, Research Policy, Volume 37, pp. 163-173.
• Jaffe, A. and Palmer, K., (1997); “Environmental Regulation and Innovation: A Panel Study”, The Review of Economics and Statistics, Volume 10, pp. 610-619.
• Jaffe, A. – Newell, R. G. and Stavins, R. N., (2002); “Environmental Policy and Technological Change”, Environmental and Resource Economics, Volume 22 (1-2), pp. 41-69.
• Lanoie, P., Laurent-Lucchetti, J., Johnstone, N. and Ambec, S. (2011); “Environmental Policy, Innovation and Performance: New Insights on the Porter Hypothesis”, Journal of Economics & Management Strategy, Volume 20(3), pp. 803-842
• Mainieri, T. – Barnett, E. G. – Valdero, T. R. – Unipan, J. B. and Oskamp, S., (1997); “Green Buying: The Influence of Environmental Concern on Consumer Behavior”, The Journal of Social Psychology, Volume 137 (2), pp. 189-204.
• Milliman, S. R. and Prince, R., (1989); “Firm Incentives to Promote Technological Change in Pollution Control”, Journal of Environmental Economics and Management, Volume 17, pp. 247-265.
• Montenero, J. P., (2002); “Permits, Standards, and Technology Innovation”, Journal of Environmental Economics and Management, Volume 44, pp. 23-44.
• Oates, W. E. – Palmer, K. and Portney, P. R., (1993); “Environmental Regulation and International Competitiveness: Thinking about the Porter Hypothesis”, RFF Discussion Paper, 94-02.
• Porter, M. E. and van der Linde, C., (1995); “Toward a New Conception of the Environment-Competitiveness Relationship”, Journal of Economic Perspectives, Volume 9 (4), pp. 97-118.
• Rennings, K., (2000); “Redefining Innovation - Eco-innovation Research and the Contribution from Ecological Economics”, Ecological Economics, Volume 32 (2), pp. 319-332.
• Scherer, F. M., (1967); “Market Structure and the Employment of Scientists and Engineers”, American Economic Review, Volume 57, pp. 524-531.
• Young, W. – Hwang, K. – McDonald, S. ve Oates C. J., (2010); “Sustainable Consumption: Green Consumer Behaviour When Purchasing Products”, Sustainable Development, Volume 18, pp. 20-31.