Environmental regulations have consistently been found to spur innovation in "clean" technologies, with one significant exception. Past cap-and-trade programs have encouraged adoption of existing pollution control technologies, but had little effect on innovation. Several explanations have been...

In this paper, the Schumpeterian growth model developed by Ertur and Koch (2011) that includes spatial interactions between units of observation working via R&D spillovers is presented in detail. The implications of this model and three additional growth models with and without spatial...