Does environmental innovation have peer effects? The moderating role of slack resources and avoidance goal orientation

Exploring the interactive patterns of environmental innovation behavior among firms is of great significance for improving the level of environmental innovation in the whole industry and achieving sustainable development. Based on social interaction theory, this study examines the peer effect of a firm's environmental innovation and the moderating effects of slack resources and avoidance goal orientation. A total of 1210 listed companies in China's manufacturing industry from 2015 to 2020 comprised the research sample, and the researchers used multiple regression analysis to analyze the data. The results indicate a peer effect of environmental innovation among firms; that is, firms' environmental innovation will positively impact the environmental innovation of other firms in the industry. Slack resources positively moderate the peer effect of environmental innovation among firms, and firms' avoidance goal orientation weakens that moderating effect. This study reveals the internal mechanism of the peer effect of environmental innovation and provides new management implications for managers' environmental-innovation decision-making.

Do environmental taxes, environmental innovation, and energy resources matter for environmental sustainability: Evidence of five sustainable economies

This study explores the relationship between environmental taxation, environmental technologies, energy resources, and consumption-based carbon emissions in five leading green economies from 2000 to 2019. The study applied the Cross-Sectional Auto-Regressive Distributed Lag (CS-ARDL) model to derive benchmark results, with Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) techniques being utilized for conducting robustness analyses. The empirical findings suggest that environmental taxation, environmental innovations, and the consumption of renewable energy are associated with a reduction in consumption-based carbon emissions, thereby contributing to enhanced environmental sustainability. Conversely, the utilization of non-renewable energy is linked to an increase in consumption-based carbon emissions. These results align with the objectives outlined in the Sustainable Development Goals' 2030 agenda, particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action), offering valuable policy implications.

Dynamic interrelations between environmental innovations, human capital, and energy security in Vietnam: new evidence from an extended TVP-VAR approach

This study employs an extended joint connectedness approach, as well as a time-varying parameter vector autoregression technique (ETVP-VAR), to characterize the interrelationships among six factors, namely, renewable energy, environmental innovations (EI), gross domestic product (GDP), human capital, energy consumption, and energy productivity (EP), from 1995 to 2019 in Vietnam. Taking a holistic view, it appears that both energy consumption and GDP are net recipients of contagion shocks. In addition, renewable energy, as well as environmental innovations, is critical net transmitters during our studied period. From 1995 to 2003, human capital constantly acted as a crucial net shock absorber before switching to a crucial net transmitter after that year. With a significant exception around 1997, this variable is mostly a shock transmitter when it comes to energy production. Pairwise connectedness reveals that renewable energy consistently appears as a shock transmitter to GDP, human capital, energy consumption, and energy productivity. That being said, environmental innovations consistently contribute to renewable and green energy volatility by transmitting shocks from other markets.

Environmental innovation and environmental sustainability in a Nordic country: evidence from nonlinear approaches

Environmental sustainability has been a priority of energy study experts, yet, until recently, the approaches largely ignored innovation issues. This paper investigates the relationship between environmental innovation and environmental sustainability in a Nordic country, Norway, from 1990:Q1 to 2019:Q4. In Norway, climate change, protection of the ozone layer, biodiversity, urbanization, acidification, eutrophication, persistently high toxic waste, and increased fragility have injected volatility and uncertainty into the Norwegians-a reality that may continue for a while. This study is unique in that it uses the nonlinear ARDL approach to analyze in depth how environmental innovation affects environmental sustainability in Norway while controlling for economic growth, renewable energy, and financial development. In particular, the findings reveal that (i) environmental innovation improves the environment in Norway over long-term horizons; (ii) strengthening patents on environmental innovations can foster clean living, green growth, and zero CO₂ emissions; (iii) investing in renewable energy sources benefits the Norwegian environment by reducing carbon emission growth; and (iv) economic growth and financial development promote CO₂ emission growth. The policy consequence is that Norway's policymakers should continue to invest in cleaner technologies and encourage environmental education and training of employees, suppliers, and consumers.

Insights from Poland on the long-run effect of energy productivity on environmental degradation: a Fourier ARDL-based approach

The globally increasing trend of fossil fuel consumption has culminated in a historical degradation of the environment and the rising threat of global warming. Researchers and policymakers aim at examining critical relationships between energy productivity and environmental degradation to make recommendations for global policy action. This paper aims to capture the effect of energy productivity on environmental degradation in Poland from 1990Q1 to 2019Q4, using novel Fourier-bases ADF unit root and Fourier-based ARDL approaches. First, outcomes of the Fourier ARDL bounds test indicate that variables are integrated; second, outcomes of the Fourier ARDL long-run estimates indicate that (i) energy productivity has long-run negative effects on CO₂ emissions; and (ii) economic growth, globalization, and primary energy consumption have positive effects on CO₂ emissions. Among the options available to Polish policymakers are (i) liberalizing domestic energy markets to offer an opportunity for electricity consumers to switch companies and (ii) continuing to pursue a policy of decarbonizing energy supply by investing heavily in renewable energy, nuclear power, e-mobility, and energy productivity.

Green innovation, globalization, financial development, and CO2 emissions: the role of governance as a moderator in South Asian countries

The current study is designed to analyze the relationship between, environmental innovations, globalization, financial development, and CO₂ emissions in the South Asian region over the period of 1996 to 2019. In this regard, the role of governance is also incorporated as a moderator along with Environmental Kuznets Curve (EKC) hypothesis. The sample size includes Bangladesh, India, Pakistan, Nepal, and Sri Lanka. The results of the robust least square show the validity of EKC in the sample countries. Environmental innovations show desirable results on CO₂ emissions, while globalization, financial development, and governance are increasing environmental degradation. The role of governance as a moderator is only effective and favorable with environmental innovation. However, in the case of globalization and financial development, governance appeared to be ineffective in lessening the rate of emissions; rather, it contributes to emissions. It clearly shows the missing link in formulating coherent policy to achieve sustainability targets. Therefore, it is desirable to improve the role of governance with respect to environmental policies not only to handle directly environmental issues but also indirectly while promoting the process of globalization and financial development.

The asymmetric and long-run effect of environmental innovation and CO2 intensity of GDP on consumption-based CO2 emissions in Denmark

The study explores the relationship between globalization, GDP, the carbon intensity of GDP, patents, and its effect on consumption-based carbon emissions (CCO2E). For analysis, novel econometric approaches include nonlinear ARDL and Fourier ARDL, and for robustness, dynamic OLS applied. The results from cointegration tests reveal that there exists a significant long-run relationship between CCO2E, globalization, economic growth, patents, and the carbon intensity of GDP. Additionally, the empirical results indicate that only positive shock in patents on environmental innovations have a negative and significant impact on CCO2E, while positive and negative shocks in GDP and carbon intensity of GDP significantly increase CCO2E. However, only a negative shock in globalization demonstrates the increase in CCO2E. Also, dynamic OLS findings confirmed the robustness. Given the outcome, it is recommended that the Danish government be cautious when approving policies intended to increase economic growth, as this could negatively affect environmental sustainability. More so, research and development must contribute to technological advancement in the Danish manufacturing sector. Despite this, it is important to prioritize patent promotion. Patent protection can enable Denmark to develop eco-friendly technologies that can reduce carbon emissions, thus enabling life to be more sustainable by utilizing fewer resources and energy. Denmark can reduce CO2E and foster economic development through a strong patent system on environmental technologies.

Effect of environmental taxes on environmental innovation and carbon intensity in China: an empirical investigation

Environmental taxes are deemed to be an important carbon mitigating factor and also encourage the producers to adopt environmentally friendly technologies. Therefore, the main objective of the analysis is to evaluate the environmental taxes on environmental innovations and carbon intensity in China. The novel quantile autoregressive distributed lag (QARDL) is applied to investigate the model empirically. From the results, we confer that the short and long run estimated coefficients of environmental taxes are positive and significant at most quantiles in the environmental innovation model, implying that the higher the rate of environmental taxes, the higher the rate of environment-related innovations. However, the estimates of environmental taxes are significant and negative in both short and long run at more than half quantiles in the carbon emissions model, suggesting the positive role of environmental taxes in reducing carbon emissions. In general, our findings imply that an increase in environment-related taxes helps reduce carbon intensity and promote environmental innovation in China. The study suggests that policymakers in China should promote environmental innovation and expand the environmental tax base to achieve the objective of carbon neutrality.

Identifying the impacts of trading construction waste across jurisdictions: a simulation of the Greater Bay Area, China, using non-linear optimization

Local authorities worldwide are actively encouraging waste material trading within their jurisdictions as a promising strategy to develop a more circular economy. Construction activities consume natural resources intensively and generate massive solid waste. With proper ex-post treatment, the waste materials can be recycled or even directly reused, hence contributing to the circular economy. Using the Hong Kong-Macao-Guangdong Greater Bay Area (GBA) as the context, we simulate the impacts of a construction waste trading market on the waste flows and the resulting monetary exchanges. Our model views each city as a representative agent that maximizes the benefit of conducting waste recycling. The interactions of their profit-seeking behavior will lead to optimized overall social costs. We then solve this problem using a non-linear optimization algorithm. The simulation shows that with a fully operational market, the traded waste materials amount to 1253.84 million m³, covering 82.36% of GBA's total construction waste generation in a typical year. The monetary transactions equal to US$38.41 billion. Such huge payments present a great opportunity for the GBA cities to develop their recycling industries. In addition, we argue that although increasing public pressure is effective in reducing inequalities in the final waste distribution, it also results in fewer financial transactions flowing to less-developed cities, which reduces their funding for developing the circular economy.

Heterogeneous impact of eco-innovation on premature deaths resulting from indoor and outdoor air pollution: empirical evidence from EU29 countries

Environmental innovations play a vital role in reducing air pollution and the number of pollution-related mortality. Most of the previous studies have examined the role of eco-innovations in environmental quality. However, to our knowledge, no study has evaluated the effects of eco-innovation on air pollution as a cause of mortality. For this purpose, this research examines the effect of eco-innovations on premature deaths from indoor and outdoor air pollution in twenty-nine European countries from 1995 to 2019. The Method of Moments Quantile Regression (MM-QR) is used to assess the impacts. The results confirm the heterogeneous effects of the main variables in both models. Both models indicate that eco-innovations reduce premature deaths from outdoor and indoor air pollution, and these effects are more significant in high quantities (75th and 90th). Also, the effect of eco-innovations on reducing mortality due to indoor pollution is more significant than that related to outdoor pollution. Eco-innovation, economic growth, renewable energy consumption, and urbanization reduce premature mortality indoors and outdoors, but CO₂ emissions increase this mortality. The results of the Dumitrescu-Hurlin causality test also support that all variables, including eco-innovation and CO₂ emissions, have a bidirectional causal relationship with indoor (LIND) and outdoor (LOUT) mortality due to air pollution. Governments and politicians can help mitigate this problem by providing more environmental innovations by increasing support packages and reducing taxes.

Environmental regulation and ESG of SMEs in China: Porter hypothesis re-tested

We examined the policy impact on the environmental and economic performance of small and medium enterprises (SMEs), which is understudied in the literature. Using the Chinese National Private Firm Biannual Survey data from 2006 to 2014 for empirical testing, we found evidence for the positive effects of environmental regulation on firm environmental investment (weak Porter hypothesis) and predictive power of environmental, social, and governance (ESG) factors for firm profitability. Particularly, resources allocated for fulfilling social responsibilities (both internal and external) contribute to firm profitability, and firm owners/managers' membership with the Federation of Industry and Commerce and involvement in firm decision-making both are profit-enhancing but hindering environmental investment. Besides offering a large-N evaluative study of regulatory impact on SMEs, the results can also inform regulators and/or investors of screening strategies in engaging SMEs in sustainability transition, which has implications for both the success of the regulatory regime and the advancement of environmental and social wellbeing.

Green innovation and income inequality: A complex system analysis

The objective of this paper is to analyse the relationship between income inequality and environmental innovation. To this end, we use the Economic Fitness and Complexity algorithm to compute an index of green inventive capacity in a panel of 57 countries over the period 1970-2010. The empirical analysis reveals that, on average, inequality is detrimental to countries' capacity to develop complex green technologies. Using non-parametric methods we further articulate this general finding and uncover interesting non-linearities in the relationship between innovation and inequality.

Environmental innovation and firm value: The moderating role of organizational capital

Since last decade, firms are facing the challenge of strict compliance in response to the stakeholders' awareness about climate change and environmental degradation. Considering these trends, we examine the effect of environmental innovation such as product innovation and process innovation on firm value and the moderating effect of organizational capital on environmental innovation-firm value nexus. Using the data of U.S. listed firms from 2002 to 2019, we find a significantly positive impact of environmental innovation on firm value. Our findings also reveal that organizational capital strengthens the positive association between environmental innovation and firm value, suggesting that firms with higher organizational capital are more likely to consider the demands of stakeholders to be environment friendly which in turn enhances their market value. These findings are aligned with the resource-based view (RBV) and highlight that organizational capital can play a significant role to increase the firm value through environmental innovation. Our results remain robust to subsample analyses, alternative proxies of main variables and are not subject to potential endogeneity concerns. Our study provides new insights into the environmental innovation-firm value nexus and presents important policy implications.

Decarbonization: examining the role of environmental innovation versus renewable energy use

Climate change resulting from a rapid increase in greenhouse gas (GHG) emissions is adversely affecting humanity. If the GHG emission continues to rise at the current pace, humanity will face severe consequences and reverse all the progress made. This paper, therefore, uses relevant data from 14 developing countries in Asia from 1990 to 2018 to examine the potential impact of environmental innovation on CO2 emissions by controlling globalization, urbanization, and economic growth. The number of environmental-related technology patents is used as a measure of environmental innovation. We employed a panel long-run regression model - FMOLS, PCSE, and FGLS to estimate the elasticity of CO2 emissions. For causal association among variables, we used Dumitrescu-Hurlin Granger causality tests. Our results show that renewable energy consumption and globalization have a significant impact in reducing CO2 emissions, while environmental technology innovations play a meager role in reducing emissions and only when economic growth support those type of investment. Furthermore, we found urbanization, oil consumption, and economic growth is detrimental to the environment, which is also evident in past studies. Therefore, countries should invest in renewable energy and environmental innovation aligned with the growth to reduce GHG emissions.

Analyzing the impact of COVID-19 on environmental innovations in manufacturing firms

COVID-19 has had a significant impact on the manufacturing industry, and manufacturers have responded to the crisis in different ways. This study investigates Norwegian manufacturers' response to the crisis, particularly how it has influenced their adoption of environmental innovations. More specifically, the study investigates whether firms choose "general" or "green" strategic responses to the crisis and how this influences the overall adoption of environmental innovations. In addition, the study investigates how the degree of environmental innovation adoption occurring before COVID-19 affects how the crisis impacted firms. The study adopts a quantitative research approach using survey data from 526 manufacturing firms-a representative sample of manufacturers in Norway. The findings reveal that those manufacturers the most environmentally innovative before COVID-19 were more impacted by the crisis. Moreover, firms adopted both general and green responses to the crisis, and the overall conduction of environmental innovations decreased during the pandemic. The main contribution is the empirical findings related to the overall impact of COVID-19 on sustainability-oriented manufacturing. The implications are discussed for both theory and practice.

Does it pay to go green? The environmental innovation effect on corporate financial performance

The current global economy demands synergies between ecological responsiveness and business models. To analyse this dynamic, this study investigates the relationship between green innovation and corporate financial performance for German HDAX companies from 2008 to 2019 by constructing an green innovation measure. A two-step GMM system and penalised-spline estimation are used to test the linear relationship between green innovation and financial proxies (return on assets, return on invested capital, and the market-to-book ratio). The results indicate a linear positive effect of green innovation on different financial performance measures. This suggests that green innovation drives resource efficiency and enhances corporate reputation, which, in turn, boosts financial performance.

Do firm-level sustainability targets drive environmental innovation? Insights from BRICS Economies

This paper examines the relationship between sustainability targets and their impacts on corporate environmental innovation. Using data over the period 2009-2018 on 202 companies from BRICS countries, covering firm-level governance, social responsibility and sustainability this paper examines firm-level sustainability targets, and incentives encourage managers to engage in more environmentally friendly activities. Using panel data probit regression, and after controlling for country-level governance and institutional factors, the study finds that embedding environmental targets in corporate strategy does encourage corporate managers to design and develop eco-friendly products and services, and such firm-level commitments at the top motivates managers to promote, market, and label environmentally friendly products. The findings call for greater emphasis on aligning executive compensation with sustainability targets rather than focusing too much on short-term accounting and market-based measures of firm performance.

Would consumers pay for environmental innovation? The moderating role of corporate environmental violations

To examine whether firms' environmental innovation can improve consumers' purchasing tendencies, we constructed a mediation model with moderation based on attribution theory. We used the altruistic attribution of firms' environmental innovation as the intermediation role and corporate environmental violations as the moderator, and we experimentally verified the model. The empirical results suggest that firms' environmental innovation positively affects consumers' purchase intention and that the positive effect of eco-product innovation is greater than that of eco-process innovation. Consumers' altruistic attribution of firms' environmental innovation behavior is decreased when an enterprise has environmental violations, which in turn weakens consumers' purchase intention.

Stakeholder Collaboration in Climate-Smart Agricultural Production Innovations: Insights from the Cocoa Industry in Ghana

Although collaboration is vital in addressing global environmental sustainability challenges, research understanding on stakeholder engagement in climate-smart production innovation adoption and implementation, remains limited. In this paper, we advance knowledge about stakeholder collaboration by examining the roles played by stakeholders in scaling-up ecological sustainability innovations. Using the illustrative context and case of green cocoa industry in Ghana, the analysis identified three distinctive phases of stakeholder engagement in ecological sustainability innovations implemented from 1960 to 2017. We highlight defining periods of ecological challenges encompassing the production recovery sustainability initiative phase solely driven by the Ghana Cocoa Board (COCOBOD)-a governmental body responsible for production, processing and marketing of cocoa, coffee and sheanut. During the period, major initiatives were driven by non-governmental organisations in collaboration with COCOBOD to implement the climate-smart agriculture scheme in the cocoa sector. The findings have implications for cocoa production research and stakeholder collaboration in environmental innovations adoption.

Can environmental innovation benefit from outward foreign direct investment to developed countries? Evidence from Chinese manufacturing enterprises

Environmental innovation is an important way to low-carbon economic growth. Outward foreign direct investment (OFDI) can produce reverse technology transfer to promote innovation. This study aims to examine whether OFDI to developed countries can transfer reverse green technology and promote the environmental innovation of manufacturing enterprises in emerging economies (EEs). Based on the technology gap theory, resource bricolage theory, resource-based view, and Potter hypothesis, this study constructs a conceptual model including the direct effect of OFDI on environmental innovation and the moderating effects of the knowledge level of the host country, multinational strategy, absorptive capacity, and environmental regulation. To verify the model, we also use a panel dataset of 424 Chinese manufacturing enterprises during 2010-2017, and the results indicate that OFDI to developed countries can produce reverse green technology transfer and promote parent companies' environmental innovation. The knowledge level of the host country and multinational strategy can further improve the impacts on environmental product innovation. However, absorptive capacity and environmental regulation in EEs do not play a significant moderating role. Consequently, this study expands the application scope of existing theories and enriches the theoretical basis of the relationship between OFDI and environmental innovation.

Dataset on the global patent networks within and between vehicle powertrain technologies - Cases of ICEV, HEV, and BEV

The emergence of networks is a crucial channel for automotive organisations to build and diffuse the required environmental innovations in the transportation sector and accelerate the transition to the green mobility economy. This article contains the dataset regarding the global patents networks shaped both within and between the three vehicle powertrains of internal combustion engine vehicle (ICEV), hybrid electric vehicle (HEV) and battery electric vehicle (BEV) for the period of 1985-2016. The data was acquired from Thomson Reuters' Derwent Innovations Index (DII) platform using the elements of 'patent families' and 'priority dates'. We describe the dataset for the three major automotive periods of 'towards sustainable mobility' (1985-1996), 'towards hybridisation' (1997-2007), and 'towards mass commercialisation' (2008-2016). The dataset bears on two levels, individual and mutual, and we used a separate combined search strategy of keywords and IPCs codes (international patent classification) for each level. At individual level, we explored the internal network features of each powertrain individually (i.e. ICEV, HEV, and BEV). Monitoring a total of 78,732 patents in the three individual powertrain networks, we discovered a total of 1856 unique parent organisations connecting vis-à-vis 5849 bilateral relationships and operating around 4450 joint patents. At mutual level, we explored the mutually common network features of the powertrains (i.e. ICEV-HEV, HEV-BEV, and BEV-ICEV). Monitoring a total of 4702 patents in the three mutual powertrain networks, we discovered a total of 102 unique parent organisations connecting vis-à-vis 384 bilateral relationships and operating around 303 joint patents. These organisations were found specialised around 435 unique subgroup-level IPC codes, of which 134 codes were related to environmentally friendly innovations. The dataset presented in this article is used in [1] and allows researchers not only to map and model the network dynamics and structures within and between the powertrains at global level, but also to analyse and forecast their knowledge flows, technical domains and environmental innovations aspect, using a wide range of models such as social network analysis or regression.

Waste recycling patents and environmental innovations: An economic analysis of policy instruments in the USA, Japan and Europe

Since natural resources are finite, new policy instruments to sustain the most efficient processes of waste recycling are required in all countries. To this end, it is critical to explore all technology mechanisms underlying solid waste researchers and practitioners' behaviors. The study focuses on to demonstrate the importance of knowledge diffusion between the source and destination of environmental innovations. This way, policymakers can elaborate opportune strategies to improve the efficiency of innovation activities. By analyzing a sample of 240 large international firms from the USA, Japan, and Europe, this paper discusses the extent to which innovation inputs, research and development, and relative technological spillovers affect environmental innovation-that is measured by the number of waste recycle and land fertilizers patents. The novelty of the study comes from introducing a knowledge production function approach to analyze the role of technological knowledge spillovers on waste recycling and land fertilizers efficiency at the firm level. The technological relatedness between the firms is computed through technological proximity, based on the construction of technological vectors for each firm. The results reveal a significant positive impact of external spillovers on firms' environmental innovation levels. This finding is important particularly in terms of policy implications concerning industrial strategies; as in order to improve environmental innovation, incentives that favor industrial relatedness and establishing integration between firms are crucial.

Innovative autocrats? Environmental innovation in public participation in China and Malaysia

Much of the environmental policy literature tends to focus on democratic contexts where environmental innovation is a product of pluralistic interactions among state and non-state actors. By bringing the (authoritarian) politics into the analysis, this article seeks to discover the processes leading to environmental innovation under nondemocratic conditions. We utilise case studies in China and then-nondemocratic Malaysia, both grappling with the twin imperatives of rapid development and social control, where the governments initiated environmental innovations to expand space for public participation and monitoring against noxious plants. We adapt the conceptual framework of "environmental innovation strategies" to illustrate the mechanisms underpinning innovative practices that address environmental issues by going beyond pre-existing public regulatory provisions. We highlight aspects distinguishing the interactive processes under authoritarianism. First, the drivers of environmental innovation are contingent on the government's role and concerns over social control and state legitimacy. Second, due to limits over political space, environmental nongovernmental organisations (ENGOs) act as issue entrepreneurs-instead of policy entrepreneurs-who turn conditions into problems deserving government attention and solution, as they engage in conflictual interactions with state authorities. Third, such innovations can strengthen nondemocratic governance while not fully plugging the gaps in existing environmental regulations. This contributes to illuminating the behaviours of state-based environmental innovators under illiberal political regimes, potentially offering lessons to activists on how to stimulate further innovations in such contexts.

Demand-pull and environmental innovations: Estimating the effects of innovative public procurement

This paper contributes to the emerging literature on the adoption of environmental innovation, by investigating the so far unexplored role of governmental demand in stimulating 'greener' production choices. Specifically, the role of innovative public procurement in driving the adoption and diffusion of sustainable manufacturing technologies is analysed. Results, based on firm-level data in the 28 Member States of the European Union, Switzerland and the USA, are obtained through non-parametric matching techniques. Those outline the crucial role of innovative public procurement in the uptake of environmental innovations. This confirms the relevance of such policy instrument in allowing countries to achieve a decarbonised and sustainable growth path which is compatible with competitiveness goals.

Corporate environmentalism and environmental innovation

Several papers have explored the effect of tighter environmental standards on environmental innovation. While mandatory regulation remains the central tenet of US environmental policy, the regulatory landscape has changed since the early 1990s with the increased recourse by federal and state agencies to corporate environmentalism--voluntary pollution prevention (P2) by firms--to achieve environmental improvements. We therefore estimate the effects of voluntary P2 activities on the patenting of environmental technologies by a sample of manufacturing firms. With our panel data of 352 firms over the 1991-2000 period, we adopt an instrumental variable Poisson framework to account for the count nature of patents and the endogeneity of the P2 adoption decision. Our results indicate that the adoption of voluntary P2 activities in the manufacturing sector has led to a statistically and economically significant increase in the number of environmental patents, suggesting that corporate environmentalism can act as a catalyst for investments in cleaner technologies. Our findings are internationally relevant given the increasing ubiquity of corporate environmentalism in both developed and developing economies.