Impact of environmental regulations on innovation and performance in the UK industrial sector
Abstract
Purpose
The role of environmental regulations in inducing innovation and improving performance has been studied in the literature. However, there have been no studies in the UK using statistical data. This paper aims to study the links among regulations, innovation and performance in the UK using sector level data.
Design/methodology/approach
The paper used structural equation modelling to study the links among the three variables simultaneously.
Findings
The analysis indicates that environmental regulations in the UK are significant in improving economic performance of the industrial sectors. They also find that, in the short run, environmental regulations negatively influence innovation, and innovation negatively influences economic performance in these sectors.
Practical implications
The results have implications both for policy makers and firms in the UK industrial sector. For policy makers, environmental regulations have generally improved economic performance. For firms, the study shows that sufficient planning in meeting government's environment standards can help improve their economic performance.
Originality/value
This is the first study in the UK to explore simultaneously the links among the three variables: environmental regulations, innovation, and performance, using secondary sector level data.
Keywords
Citation
Ramanathan, R., Black, A., Nath, P. and Muyldermans, L. (2010), "Impact of environmental regulations on innovation and performance in the UK industrial sector", Management Decision, Vol. 48 No. 10, pp. 1493-1513. https://doi.org/10.1108/00251741011090298
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited