Resource Efficiency, Environmental Policy and Eco-Innovations for a Circular Economy: Evidence from EU Firms

26 Pages Posted: 19 Aug 2017

See all articles by Giulio Cainelli

Giulio Cainelli

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee; CERIS-CNR

Alessio D'Amato

University of Rome Tor Vergata - Faculty of Economics

Massimiliano Mazzanti

University of Ferrara

Date Written: November 13, 2017

Abstract

Innovation adoption and diffusion by firms are key pillars for the EU strategy on resource-efficiency and the development of a circular economy. This paper presents new EU evidence regarding the role of environmental policy and green demand drivers to sustain the adoption of resource efficiency-oriented eco-innovations. This paper originally implements new estimators to address the endogeneity of binary framed policy and demand covariates, which typically characterise firm level survey data. Our results suggest that when endogeneity is accounted for, environmental policy is the only factor always significant in driving the adoption of innovations that reduce the use of waste and material, while demand-side and market-factors do not always play a central role. The result is an important piece of new quantitative-based knowledge, which complements the currently large case study-based evidence on the setting of sound management and policy strategies for the circular economy.

Keywords: Eco innovation; circular economy; innovation drivers; EU; environmental regulation; market demand

Suggested Citation

Cainelli, Giulio and D'Amato, Alessio and Mazzanti, Massimiliano, Resource Efficiency, Environmental Policy and Eco-Innovations for a Circular Economy: Evidence from EU Firms (November 13, 2017). SWPS 2017-24. Available at SSRN: https://ssrn.com/abstract=3070397 or http://dx.doi.org/10.2139/ssrn.3070397

Giulio Cainelli (Contact Author)

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee ( email )

Piazza Umberto I
70124 Bari, 70121
Italy

CERIS-CNR ( email )

Via Avogadro 8
10121 Torino
Italy

Alessio D'Amato

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

Massimiliano Mazzanti

University of Ferrara ( email )

C.so Ercole I° d'Este 37
Ferrara, 44100
Italy

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