Revisiting the Porter hypothesis: An empirical analysis of Green innovation for the Netherlands

G. van Leeuwen, P. Mohnen

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Almost all empirical research that has attempted to assess the validity of the Porter hypothesis (PH) has started from reduced-form models, for example, single-equation models for estimating the contribution of environmental regulation to productivity. This paper follows a structural approach that allows testing what is known in the literature as the 'weak' and the 'strong' version of the PH. Our 'Green Innovation' model includes three types of eco-investments to explain differences in the incidence of two types of eco-innovation, which are allowed to affect labor productivity. We allow for complementarity between the two types of eco-innovations. Using a comprehensive panel of Dutch manufacturing firm-level data we estimate the relative importance of environmental regulations on eco-investment and eco-innovations. The results of our analysis show a strong corroboration of the weak and a nuanced corroboration of the strong version of the PH.

Original languageEnglish
Pages (from-to)63-77
Number of pages15
JournalEconomics of Innovation and New Technology
Volume26
Issue number1-2
Early online date2016
DOIs
Publication statusPublished - 2017

JEL classifications

  • o32 - Management of Technological Innovation and R&D

Keywords

  • complementarity
  • environmental regulation
  • Green innovation
  • Porter hypothesis
  • productivity
  • ENVIRONMENTAL-POLICY
  • TECHNICAL CHANGE
  • PRODUCTIVITY

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