Policy stringency and (eco)-innovation performance: a cross country analysis

Abstract

Policymakers have an important role in enabling eco-innovation. To assess the effectivity of these interventions, it is necessary to characterize policies, namely the level of policy stringency. The present study contributes to extant empirical literature by performing a cross-country assessment of the impact of policy stringency on the outcomes (rather than the inputs) of the eco-innovation process. Contrasting with extant evidence, results fail to evidence the relevance of policy stringency for eco-innovation performance. Notwithstanding, policy stringency emerged indirectly as a potential critical determinant. Indeed, the possibility to save costs is often driven by policy instruments that punish pollution intensive firms.