Carrots or Sticks: Which Policies Matter the Most in Sustainable Resource Management?

Abstract

Green growth has resulted from resource management, setting the speed for sustainable development. Eco-innovations are essential for the improvement of a firm’s performance with societal gains, demanding special attention from policy makers. This paper deals with the effect of policy actions on the enhancement of eco-innovation adoption. The Community Innovation Survey (CIS) 2012–2014 is used to estimate the impact of ‘carrots’ and ‘sticks’ on innovations with ecological benefits. In addition, the impact of a firm’s structural characteristics in ecological strategies is investigated. Regulations and taxes enhance eco-innovation, but grants are only relevant in the case of eco-innovations with external benefits. The firm dimension and non-technological innovation also increase the eco-innovation propensity. Embedding policy actions with environmental concerns will enhance social responsibility and promote resource preservation, providing waste as an economic value. The purpose of this paper is twofold. First, it aims to appraise the effectiveness of the different policy instruments applied in the adoption of innovation with ecological benefits with both internal and external benefits. Secondly, it aims to identify which firm characteristics determine these managerial strategies. Hopefully, light will be cast on the topic so that public and private decision-makers will be given recommendations for policy package design working towards smart and green growth.

Does Technological Innovation Promote Green Development? A Case Study of the Yangtze River Economic Belt in China

“…For the lower and middle reaches, TI is currently inhibiting green development, so regulation, IS optimization, and other ways should be used to synergize while enhancing technological capabilities. In a word, ‘carrots’ and ‘sticks’ are both necessary in the process of urban green development [ 61 ].…”

Is It Necessary to Centralize Power in the CEO to Ensure Environmental Innovation?

“…As the independent variable in Equation (2), we consider Env_Inno. In this model, in addition to the variables related to firm characteristics, following García-Sánchez et al (2020b, 2021, we include sectoral munificence level (Munif), dividend per share (Div) and two scores that determine the company's corporate governance practices (CGScore) and social commitment (SocialScore). Munificent industries are characterized by benefiting from greater tax incentives and better financing plans for investments in initiatives such as environmental innovation projects, so that managers of firms belonging to these industries have more incentives and resources to implement eco-innovation strategies (García-Sánchez et al 2020b).…”

“…The independent and control variables are introduced with a lag in order to correct for causality and endogeneity problems. Furthermore, following García-Sánchez et al (2020a, 2020b, 2021 both models also incorporate an error term divided into two elements: η, which refers to the specific effect of the company and allows us to control the unobservable heterogeneity, and µ, which refers to the traditional random perturbance.…”

Eco-Efficiency and Stock Market Volatility: Emerging Markets Analysis

“…The efficiency with which such policies and practices support the environment and measure society's response represent the fundamental pillars of economic growth, ensuring sustainable business and generating new sources of employment. Consequently, government policy actions on ecological issues can stimulate economic growth while combating environmental degradation, biodiversity loss, and unsustainable natural resource use (Costa 2021).…”