Green Innovation

We find that the average value of clean-technology (green) innovation is 37–52% higher due to the effects of environmental regulations, a firm’s exposure to regulatory risk, its knowledge stock of clean technology, and product market competition. This value, however, has declined due to the sheer number of green innovation during the 1963–2019 period. Evidence on firms’ operating performance, toxic releases, and EPA enforcement cases indicates that benefits arise from cost effective operating processes and compliance with imminent EPA emission standards. Overall, our results suggest that green innovation increases firm value