The Relationship between Environmental Innovation and Regulation: The French Agro-Food Sector

By Delphine Gallaud, Michel Martin, Sophie Reboud, Corinne Tanguy

English

The agro-food industry is recognized as a major source of pollution. Porter and van der Linde argue in their well known hypothesis that there is a positive relationship between the level of regulation and the rate of environmental innovation produced by firms. Firms in the agro-food sector should thus develop a great number of such innovations. What is the reality? To explore this question, data collected in the Community Innovation Survey (CIS 8) on innovation by firms in the agro-food sector are used and subjected to a multiple correspondence analysis and a hierarchical analysis. The results suggest that Porter’s hypothesis is not supported in the agro-food sector, because even though they are regulated, only a small number of firms innovate. The results suggest also that firms can implement an autonomous innovation strategy based on intangible innovation (e.g. organizational innovation and marketing innovation). An additional result is that small firms seem to innovate as much as their bigger counterparts and would rather use intangible innovation, but medium firms seem less innovative. JEL Codes: L20, L66, O31, Q55

Keywords

  • environmental innovation
  • porter hypothesis
  • agro-food sector
  • innovation strategy
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