Governance, Regulation and Innovation

Governance, Regulation and Innovation

Theory and Evidence from Firms and Nations

Edited by Mehmet Ugur

This book aims to disentangle the complex relationship between innovation and its potential determinants, paying special attention to the roles of governance and regulatory frameworks, and the ways in which the latter interact with other drivers of innovation such as competition and the innovator’s closeness to the technology frontier.

Chapter 6: The impact of environmental regulation frameworks and firm-level factors on eco-innovations: evidence from DEFRA survey of UK manufacturing firms

Pelin Demirel and Effie Kesidou

Subjects: business and management, corporate governance, economics and finance, corporate governance, economics of innovation, industrial economics, institutional economics, innovation and technology, economics of innovation


Due to growing concerns about environmental impacts of the industrial society, governments are carefully considering their strategies for sustainable development. Indeed, one can observe the emergence of an increasingly popular stance which posits that the ‘environment should no longer be sacrificed to economic growth: rather, the two should be reconciled’ (Aggeri, 1999, 706). In easing the unambiguous trade-offs between environmental protection and economic growth, eco-innovations have a central role to play through improving environmental technologies that measure, detect and treat pollution; avoid it at the source; and ensure that the end product has a life span with minimal environmental impact. An expanding body of empirical and theoretical literature on eco-innovation aims to understand the circumstances which are more conducive to environmental technology investments. The ‘ecological, economic and social’ dimensions of eco-innovations require an inter-disciplinary approach which combines insights from environmental and innovation economics and is aware of the different methodological lenses of the neoclassical and evolutionary schools of thought (Rennings, 2000, p. 322).

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