Environmental Policy Stringency and Technological Innovation: Evidence from Patent Counts

This paper examines the impact of public environmental policy, as reflected in expenditures on pollution abatement and control, on innovations in environment-related technology. The analysis is conducted using patent data for a panel of 16 countries between 1985 and 2004. It is found that there are important differences in innovation effects of resources spent in the public vs. private sector and resources spent on pollution control activities vs. directly on R&D. These results are broadly confirmed with a subsequent analysis on a broader cross-section of 33 countries over the period 2001-2006, using an alternative measure of environmental policy stringency.

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