Customer, regulatory, and competitive pressure as drivers of environmental innovation


Yalabik, B. and Fairchild, R. J., 2011. Customer, regulatory, and competitive pressure as drivers of environmental innovation. International Journal of Production Economics, 131 (2), pp. 519-527.

Related documents:

This repository does not currently have the full-text of this item.
You may be able to access a copy if URLs are provided below. (Contact Author)

Official URL:

Related URLs:


We develop an economic analysis in order to examine the effects of consumer, regulatory, and competitive pressure on firm investments in environmentally friendly production. Specifically, we ask: Why do firms vary in their levels of environmental innovation? Under what conditions are such pressures effective in bringing about environmental innovation? We first consider a monopolist who faces the twin pressures of reduced customer demand and regulatory penalties, as a result of its emissions. In response to these pressures, the firm has the opportunity to make a costly investment in reduction of emissions. Secondly, we consider a competitive scenario in which two firms compete for environmentally sensitive customers. Solving our model, we find that pressure has the intended effect as long as the firm's initial level of emissions is below a certain threshold. If the emissions are above this threshold, we find that pressure might have an adverse effect on the firm's environmental investment, and that subsidies that support environmental innovation can be a better alternative. We also show that competition over environmentally sensitive customers can improve the effectiveness of environmental pressures.


Item Type Articles
CreatorsYalabik, B.and Fairchild, R. J.
Related URLs
DepartmentsSchool of Management
ID Code23211


Actions (login required)

View Item