environmental regulation on innovation and on productivity generally in separate analyses and mostly focusing on the USA. The few … existing studies focusing on Europe investigate the effect of environmental regulation either on green innovation or on … performance indicators such as exports. We instead look at overall innovation and productivity impact that are the most relevant …

Using a unique plant-level dataset we examine total factor productivity (TFP) growth and its components, related to … literature on the Porter Hypothesis, which posits a positive relationship between environmental regulation and "green" TFP growth … and enforcement. Our key findings are: (1) prudential regulation limits expansion of plants with high initial pollution …