Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out?

By Hanna Hottenrott, Sascha Rexhauser. Industry and Innovation, 2015

169 citations recorded by the source corpus.

Substantial policy effort is devoted to stimulate environmentally friendly technology through regulation and subsidies. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts in affected firms may increase the cost of regulation. We study the effects of regulation-induced environmental technology on innovation activities for a sample of firms in Germany. We find some evidence for a crowding out of firms' in-house R&D, especially for firms facing financing constraints. Innovation outcomes and investments in innovation-related fixed assets are not affected. Moreover, subsidy-backed environmental technology does not crowd out R&D.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/35fc183be119ab973d15a091d335e9f6701d1121

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In Economics and Econometrics

Citations in the corpus

Environmental Regulation and Green Skills: An Empirical Exploration (2018, background): “Several recent studies ﬁ nd evidence of the positive effect of management on energy ef ﬁ ciency and environmental performance (e.g., Martin et al. 2012; Hottenrott and Rexhauser 2015).”
Modelling innovation and the macroeconomics of low-carbon transitions: theory, perspectives and practical use (2019, background): “A debate also exists as to whether government or other finance of innovation in the early stages of the innovation chain crowds-out or crowds-in other private finance in later stages (Hottenrott & Rexhäuser, 2015; Mazzucato, 2011; Mazzucato & Semieniuk, 2017, 2018; Popp & Newell, 2012).”
The Impacts of Environmental Regulations on Competitiveness (2017, background): “There seems to be a larger crowding out effect for small firms that are credit constrained (Hottenrott and Rexh€auser 2013).”