Voluntary environmental regulation and firm innovation in China
Porter Hypothesis has evoked almost three-decade debate on whether environmental regulation can stimulate firm innovation. However, one missing component in this long stream of literature is the absence of voluntary environmental regulation when defining environmental regulation policy in the first...
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| Published in: | Economic modelling Vol. 89; pp. 10 - 18 |
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| Main Authors: | , , |
| Format: | Journal Article |
| Language: | English |
| Published: |
Elsevier B.V
01-07-2020
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| Subjects: | |
| Online Access: | Get full text |
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| Summary: | Porter Hypothesis has evoked almost three-decade debate on whether environmental regulation can stimulate firm innovation. However, one missing component in this long stream of literature is the absence of voluntary environmental regulation when defining environmental regulation policy in the first place. We address this gap by examining the impact of the voluntary environmental certification of ISO 14000 on firm innovation. Adopting firm-level survey data, our results show that ISO 14000 certification leads to more innovation input and output in sampled Chinese firms. Therefore, our study sheds light to the debate on Porter Hypothesis and contributes to green innovation literature.
•Adoption of voluntary environmental regulation drives firm innovation in China.•Voluntary environmental regulation results in the “innovation offset effect".•ISO 14000 Certification leads to firm innovation on both input and output.•Focusing on voluntary regulation sheds light to the debate for Porter Hypothesis. |
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| ISSN: | 0264-9993 1873-6122 |
| DOI: | 10.1016/j.econmod.2019.12.020 |