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Does environmental regulation indirectly induce upstream innovation?: New evidence from India

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Does environmental regulation indirectly induce upstream innovation? New evidence from India. / Chakraborty, Pavel; Chatterjee, Chirantan.
In: Research Policy, Vol. 46, No. 5, 06.2017, p. 939-955.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Chakraborty, P & Chatterjee, C 2017, 'Does environmental regulation indirectly induce upstream innovation? New evidence from India', Research Policy, vol. 46, no. 5, pp. 939-955. https://doi.org/10.1016/j.respol.2017.03.004

APA

Chakraborty, P., & Chatterjee, C. (2017). Does environmental regulation indirectly induce upstream innovation? New evidence from India. Research Policy, 46(5), 939-955. https://doi.org/10.1016/j.respol.2017.03.004

Vancouver

Chakraborty P, Chatterjee C. Does environmental regulation indirectly induce upstream innovation? New evidence from India. Research Policy. 2017 Jun;46(5):939-955. Epub 2017 Mar 31. doi: 10.1016/j.respol.2017.03.004

Author

Chakraborty, Pavel ; Chatterjee, Chirantan. / Does environmental regulation indirectly induce upstream innovation? New evidence from India. In: Research Policy. 2017 ; Vol. 46, No. 5. pp. 939-955.

Bibtex

@article{f85f6638c2ef4cb7b541a44b18361647,
title = "Does environmental regulation indirectly induce upstream innovation?: New evidence from India",
abstract = "Exploiting a quasi-natural experiment, which involves the imposition of a ban by Germany in 1994 on an input ({\textquoteleft}Azo-dyes{\textquoteright}) used by the Indian leather and textile industries, we estimate the indirect impact of the environmental regulation on innovation activities of upstream (dye-producing) firms in India and examine how it varies by different firm characteristics: size and ownership. We find robust evidence of a significant increase (11–61%) in innovation expenditure for the dye-makers in response to the {\textquoteleft}Azo-dyes{\textquoteright} ban. Additionally, we find: (i) increase in technology transfer to the tune of 1.2–2.5 times more than that of internal R&D; (ii) increase in innovation expenditure with firm size; (iii) domestic firms investing more in technology transfer as compared to R&D, whereas foreign firms only undertaking the latter and (iv) decrease in investments towards innovation by downstream firms, thereby pointing towards a possible substitution effect in aggregate innovation by upstream firms. Our results are consistent with a variety of estimation methods and robustness checks.",
keywords = "{\textquoteleft}Azo-dyes{\textquoteright} ban, Innovation, R&D expenditure, Technology transfer, Dye-producing firms, India",
author = "Pavel Chakraborty and Chirantan Chatterjee",
year = "2017",
month = jun,
doi = "10.1016/j.respol.2017.03.004",
language = "English",
volume = "46",
pages = "939--955",
journal = "Research Policy",
issn = "0048-7333",
publisher = "Elsevier",
number = "5",

}

RIS

TY - JOUR

T1 - Does environmental regulation indirectly induce upstream innovation?

T2 - New evidence from India

AU - Chakraborty, Pavel

AU - Chatterjee, Chirantan

PY - 2017/6

Y1 - 2017/6

N2 - Exploiting a quasi-natural experiment, which involves the imposition of a ban by Germany in 1994 on an input (‘Azo-dyes’) used by the Indian leather and textile industries, we estimate the indirect impact of the environmental regulation on innovation activities of upstream (dye-producing) firms in India and examine how it varies by different firm characteristics: size and ownership. We find robust evidence of a significant increase (11–61%) in innovation expenditure for the dye-makers in response to the ‘Azo-dyes’ ban. Additionally, we find: (i) increase in technology transfer to the tune of 1.2–2.5 times more than that of internal R&D; (ii) increase in innovation expenditure with firm size; (iii) domestic firms investing more in technology transfer as compared to R&D, whereas foreign firms only undertaking the latter and (iv) decrease in investments towards innovation by downstream firms, thereby pointing towards a possible substitution effect in aggregate innovation by upstream firms. Our results are consistent with a variety of estimation methods and robustness checks.

AB - Exploiting a quasi-natural experiment, which involves the imposition of a ban by Germany in 1994 on an input (‘Azo-dyes’) used by the Indian leather and textile industries, we estimate the indirect impact of the environmental regulation on innovation activities of upstream (dye-producing) firms in India and examine how it varies by different firm characteristics: size and ownership. We find robust evidence of a significant increase (11–61%) in innovation expenditure for the dye-makers in response to the ‘Azo-dyes’ ban. Additionally, we find: (i) increase in technology transfer to the tune of 1.2–2.5 times more than that of internal R&D; (ii) increase in innovation expenditure with firm size; (iii) domestic firms investing more in technology transfer as compared to R&D, whereas foreign firms only undertaking the latter and (iv) decrease in investments towards innovation by downstream firms, thereby pointing towards a possible substitution effect in aggregate innovation by upstream firms. Our results are consistent with a variety of estimation methods and robustness checks.

KW - ‘Azo-dyes’ ban

KW - Innovation

KW - R&D expenditure

KW - Technology transfer

KW - Dye-producing firms

KW - India

U2 - 10.1016/j.respol.2017.03.004

DO - 10.1016/j.respol.2017.03.004

M3 - Journal article

VL - 46

SP - 939

EP - 955

JO - Research Policy

JF - Research Policy

SN - 0048-7333

IS - 5

ER -