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Empirical Determinants of Innovation in European Countries: Firm-level Analysis Based on CIS 2018

Published online by Cambridge University Press:  04 November 2024

Elena Makrevska Disoska Open the ORCID record for Elena Makrevska Disoska [Opens in a new window] ,
Jasna Tonovska ,
Katerina Toshevska-Trpchevska ,
Dragan Tevdovski  and
Viktor Stojkoski
Elena Makrevska Disoska
Affiliation:
Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia. Email: [email protected]
Jasna Tonovska
Affiliation:
Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia. Email: [email protected]
Katerina Toshevska-Trpchevska
Affiliation:
Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia. Email: [email protected]
Dragan Tevdovski
Affiliation:
Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia. Email: [email protected]
Viktor Stojkoski
Affiliation:
Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia. Email: [email protected]
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Abstract

This study examines the role of perceptions about environmental regulations and their influence on the innovative performance and productivity of firms in Germany, Southern Europe, and Central and Eastern Europe. Utilizing the CDM model for innovative performance and data stemming from the Community Innovation Survey (CIS), we explore the alignment with the Porter hypothesis, which posits that well-designed environmental regulations can stimulate technological innovation and enhance market competitiveness. Our findings present a mixed view: in Germany, positive perceptions about environmental regulations correlate with the initiation of innovation activities, contributing to an increase in labour productivity. This supports the Porter hypothesis, evidencing that regulations can lead to beneficial ‘innovation offsets’ such as reduced resource use and pollution. Conversely, in Southern Europe and Central and Eastern Europe, the perceptions about these regulations on innovation activities are insignificant, with no considerable correlation observed between perceptions about environmental regulations and innovation output. Our findings are crucial for policymakers, environmental regulators, and business leaders aiming to leverage environmental regulations to boost innovation and competitiveness within their regions.

Type
Article
Information
European Review , Volume 32 , Issue 3 , June 2024 , pp. 269 - 290
Copyright
© The Author(s), 2024. Published by Cambridge University Press on behalf of Academia Europaea Ltd

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