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The impact of environmental regulation on the competitiveness of firms and industries remains a hot topic. Since the formulation of the Porter hypothesis, scholars from different research areas have tried to confirm or deny it. However, despite a vast literature engaging this debate, it remains unclear whether and under what conditions the hypothesis could be considered valid. We believe that this is due to the need to consider some additional factors. The aim of this review is to propose additional and significant themes, namely value appropriation and pollution intensity, to be considered when examining the impact of environmental regulation on the innovation and profitability of firms. Results show that the validity of the Porter hypothesis cannot be proved in any condition, but at the same time, there are additional factors that have a relevant influence on that construct, which can lead to a validation or rejection of the hypothesis.

PurposeThe purpose of the paper is to analyse the changing of governance modes for the acquisition of external technology in the context of design driven innovation.Design/methodology/approachThis is an explorative study drawing on cases of new product development (NPD) by six design‐oriented Italian firms. In analyzing the cases a longitudinal approach is taken.FindingsThe analysis of the cases shows a similar pattern for technology sourcing during the NPD process, starting with informal networks and ending with hierarchical structures. In the early stages of NPD, when market uncertainty and technological uncertainty are very high, these companies choose an informal network. However, once the product concept is defined and the companies need to become familiar with a technology, they move to strategic alliances with partners. In the final stages of NPD, more hierarchical structures seem to prevail.Research limitations/implicationsThere are two main limitations of the study. The paper investigates the influence of uncertainty on the choice of governance modes and does not consider other variables that could impact on choice such as assets specificity, frequency of transactions, product complexity, cultural distance among partners, etc. Another limitation of the study is the small set of cases.Practical implicationsFrom a managerial point of view, this study suggests that firms which develop successful design‐driven innovations follow an organizational pattern for technology sourcing during the NPD process, starting with informal networks and ending with hierarchical structures. Thus it is extremely important for these firms to have an open‐minded management that fosters the creation of a wide external network. This openness shown by the firms towards collaboration with other organizations in order to acquire ideas, new materials and knowledge must be offset by the secure protection of the results of the innovation process. Managers must foresee these needs and find ways to safeguard the results obtained through experimentation by means of patents or exclusive contracts with the supplier.Originality/valueThe paper contributes to the research on the theme of design‐driven innovation, analyzing the evolution and change in governance modes across the new product development process. It thus differentiates from the existing literature adopting a dynamic view, where multiple transactions are taken into consideration.

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