Regulation, Business, and Sustainable Development: The Antecedents of Environmentally Conscious Technological Innovation

Abstract

A growing number of firms have begun work toward the development of innovative systems that consume fewer resources, reduce waste, enhance productivity, while creating new market opportunities. However, all of this environmentally friendly innovation occurs under varying types/levels of regulation and the role of such regulation is still debatable. To date, little research exists that investigates the relative importance of market-driven versus regulatory actions in influencing environmental technological innovation. This article presents a model of the antecedents of environmentally conscious technological innovation under high and low amounts of regulation. The authors present four abbreviated case studies undertaken as part of a larger U.S. Environmental Protection Agency (EPA)-funded study that describe environmentally conscious product and process innovations in high and low regulation environments. The authors use the case studies to examine the extent to which the data support our model. The article concludes with a discussion of the implications of our findings.