@techreport{NBERw5545,
 title = "Environmental Regulation and Innovation: A Panel Data Study",
 author = "Adam B. Jaffe and Karen Palmer",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "5545",
 year = "1996",
 month = "April",
 URL = "http://www.nber.org/papers/w5545",
 abstract = {In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors, by stimulating domestic innovation.  We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries.  We find that lagged environmental compliance expenditures have significant positive effect on R&D expenditures when we control for unobserved industry-specific effects.  We find little evidence, however, that industries' inventive output (as measured by patent applications) is related to compliance costs).},
}