Adoption of waste-reducing technology in manufacturing: Regional factors and policy issues

The paper provides a joint theoretical-empirical investigation to assess the adoption by manufacturing firms of innovations aimed at improving waste related performance. In line with the recent emphasis on the 'external' factors stimulating innovation, which often are more important than 'traditional' drivers such as R&D, we address the role of local policy environments and regional features. We analyse firms' innovation adoption choices in a simplified technology adoption model, augmented to account for factors relevant to determining environmental innovation (EI). We frame our empirical analysis in an original integration of data from a firm level survey (Italian CIS2008 survey of manufacturing firms) and regional level waste related information. Our econometric analysis shows that firms adopt EI on the basis of some firm specific and relational factors, while usual drivers such as R&D have no impact. The evidence from our study supports the role of regional factors related to waste management and policy, that is, firms located in regions featuring better separated waste collection and stricter waste policy are more likely to adopt EI