Location determinants of green technological entry: evidence from European regions

Abstract

In this paper, we explore the spatial distribution and the location determinants of new green technology-based firms across European regions. Integrating insights from evolutionary economic geography and the literature on knowledge spillovers, we study the importance of new knowledge creation and the conditioning role played by regional technological relatedness in fostering combinatorial opportunities underlying the process of green technological entry. The analysis is based on a dataset covering over 900 NUTS3 regions for 15 European countries obtained merging economic data from ESPON-Eurostat and patent information from the PATSTAT-CRIOS database for the period 1996-2006. Our results show that the geographical distribution of green technological entry across European regions is not evenly distributed, offering evidence of spatial path dependence. In line with this, we find evidence of a significant role played by the characteristics of the regional innovation system. New green innovators are more likely to develop in regions defined by higher levels of technological activity underlying knowledge spillovers and more dynamism in technological entry. Moreover, our findings point to an inverted-U relationship between regional technological relatedness and green technological entry. Regions whose innovation activity is defined by cognitive proximity to environmental technologies support interactive learning and knowledge spillovers underlying entrepreneurship in this specific area. However, too much relatedness may cause technological lock-ins and reduce the set of combinatorial opportunities.

Diversifying in green technologies in European regions: does political support matter?

“…While the transition literature often tends to underline the radical or disruptive nature of green technologies, we find strong evidence that new green activities are more likely to develop in regions where related capabilities are available. This outcome replicates findings in other studies (Corradini, 2019;van den Berge & Weterings, 2014;Tanner, 2014Tanner, , 2016.…”

“…Although we cannot confirm all expectations regarding control variables, one should also bear in mind that this literature on regional green technological diversification is quite recent and still lacks a comprehensive frame of reference. Having said that, some of the few existing empirical studies on green diversification of regions tend to confirm that most of the control variables we consider are either weakly or non-statistically significant (e.g., Corradini, 2019;Montresor & Quatraro, 2019;van den Berge & Weterings, 2014).…”

“…Empirical evidence on relatedness and greening is expanding. Corradini (2019) found an inverted 'U'-shaped relationship between entry of regions in green technologies and relatedness to green knowledge in the region. As new environmental technologies are often at an early stage of development (OECD, 2015), they are complex technologies that need inputs from a variety of sources (Barbieri & Consoli, 2019;Cooke, 2012).…”

“…Regions present huge dissimilarities regarding their ability to create and develop new green activities. There is an uneven distribution of green specializations across regions in both Europe (Corradini, 2019;Tanner, 2014Tanner, , 2016 and the United States (Barbieri & Consoli, 2019). Although climate change is a global phenomenon, local solutions may be crucial to respond to this global challenge (Murphy, 2015).…”

“…This represents a relatively new topic of investigation within this strand of research, and this paper contributes to this growing stream of literature. Research in this field indicates that relatedness also appears to be a driving force behind green diversification of regions (Corradini, 2019;Montresor & Quatraro, 2019;Tanner, 2014Tanner, , 2016van den Berge & Weterings, 2014;van den Berge et al, 2019). This finding provides new and additional insights to the transition literature that has a tendency to underestimate processes of past dependence, and to overlook the role of regional capabilities.…”