Abstract
In this paper, I present the impact of environmental regulation on technological innovation and competitive advantage. Previous research has verified that several aspects of environmental regulation, such as economic incentive, anticipation, stringency and certainty drive new technologies. However, such research merely pays attention to the technological innovation within each firm. How does some technological innovation diffuse within the industry and how does the firm get competitive advantage confronted with the environmental regulation? To answer this question, I use the case study strategy. The case describes the process of developing sulphur-free gasoline that reduces the CO2 emission volume developed by a major Japanese oil company. Through the case analysis, I show that technological innovation before regulation have a possibility to provide the firm high quality finished technological innovation and also provide the firm a chance of creating competitive advantage.
Highlights
Many scientists have known about greenhouse effect for over a century
The greenhouse effect is caused by radiation of sun that is reflected off the earth’s surface and trapped by CO2and other greenhouse gases (GHG) in the atmosphere
We show two points
Summary
Many scientists have known about greenhouse effect for over a century. The greenhouse effect is caused by radiation of sun that is reflected off the earth’s surface and trapped by CO2and other greenhouse gases (GHG) in the atmosphere. Previous research that has compared the technological characteristics of existing and new technologies argue that the possibility of applying a firm’s existing resources will determine the acceptance of innovation (Abernathy & Clark, 1985; Christensen, 1997; Forster, 1986; Henderson & Clark, 1990; Leonard-Barton, 1992; Tushman & Anderson, 1986). This argument focuses on existing resources as determinants which lead what types of technology will be used for resolution of problems. When the environmental regulation is introduced, how can the firm diffuse technological innovation and how can they create competitive advantage? The purpose of this study is to make clear this fact
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