Integrated product policy and environmental product innovations: An empirical analysis

In recent times, the European Commission has been placing an emphasis on promoting the so-called Integrated Product Policy (IPP) that aims to support the realisation of environmental product innovations in order to achieve a broad reduction of all environmental impacts along a product's life cycle. Based on a unique firm level data set of the German manufacturing sector, this paper empirically examines the relationship between environmental organisational measures that are considered IPP-measures by the European Commission and environmental product innovations. According to the econometric analysis, the certification of environmental management systems has a significantly positive effect on environmental product innovations. Measures concerning waste disposal or take-back systems of products seem to be an even more important driver for environmental product innovations. The econometric analysis also shows that other factors that have been suggested in the literature such as environmental policy, technology push and market pull as well as specific other firm characteristics have a significant positive influence on environmental product innovations. According to the descriptive analysis of environmental product innovators, not soft factors but economic aspects (i.e., higher prices) seem to be major obstacles to the commercial exploitation of environmental products and thus also to environmental product innovations.