Abstract
A weak version of the Porter hypothesis claims that strict environmental policy provides positive innovation incentives, hence triggering improved competitiveness and securing environmental quality.In a comparative way, this paper empirically tests this hypothesis across countries by linking environmental stringency to innovation proxied by patents in the field of SO2 abatement over the period 1970-2000.Three different models of environmental stringency are examined.Two of these models do not reveal a positive significant effect on innovation as a result of increased stringency.In the theoretically preferred model, however, a positive relationship between environmental stringency and innovation is obtained.
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