The Effect of Environmental Innovations on Employment Changes: An Econometric Analysis

This paper examines the determinants of employment changes due to an environmental innovation of a establishment. The data stem from telephone surveys in five European countries. 1594 interviews have been realised with environmentally innovative establishments representing the European industry and service sector. Based on results of discrete choice models, we show that if the most important environmental innovation is a product or service innovation, it has a significantly positive effect on the probability of an increase in the employment compared to the probability of no noticeable change. In contrast, if the most important environmental innovation is an end-of-pipe innovation, it has a significantly positive influence on employment decrease. Methodologically, we consider the Multinomial Logit Model and several Multinomial Probit Models. We find that the estimates of the parameters of the explanatory variables are very similar in the different approaches.

Rennings, Klaus, Andreas Ziegler and Thomas Zwick (2004), The Effect of Environmental Innovations on Employment Changes: An Econometric Analysis, Business Strategy and the Environment 13 (6) , 374-387