Voluntary Regulations and Innovation: The Case of ISO 14001
2014 (English)In: PAR. Public Administration Review, ISSN 0033-3352, E-ISSN 1540-6210, Vol. 74, no 2, 233-244 p.Article in journal (Refereed) Published
Governments enact environmental regulations to compel firms to internalize pollution externalities. Critics contend that regulations encourage technological lock-ins and stifle innovation. Challenging this view, the Porter-Linde hypothesis suggests that appropriately designed regulations can spur innovation because (1) pollution reflects resource waste; (2) regulations focus firms' attention on waste; and (3) with regulation-induced focus, firms are incentivized to innovate to reduce waste. This article explores the regulation-innovation linkage in the context of voluntary regulations. The authors focus on ISO 14001, the most widely adopted voluntary environmental program in the world. Examining a panel of 79 countries for the period 1996-2009, they find that country-level ISO 14001 participation is a significant predictor of a country's environmental patent applications, a standard proxy for innovation activity. The policy implication is that public managers should consider voluntary regulation's second-order effects on innovation, beyond their first-order effects on pollution and regulatory compliance.
Place, publisher, year, edition, pages
2014. Vol. 74, no 2, 233-244 p.
IdentifiersURN: urn:nbn:se:su:diva-102977DOI: 10.1111/puar.12189ISI: 000333040300011OAI: oai:DiVA.org:su-102977DiVA: diva2:714533