Journal of Business Economics and Finance, cilt.5, ss.148-155, 2016 (Diğer Kurumların Hakemli Dergileri)
Environmental problems and the solutions investigated within the economic theory has been high on the global agenda since 70s.
Variables that encourage firms to innovate and/or use environment-friendly technologies is an important subtitle in this issue. According to
the common definition in the environmental economics literature, eco-innovation consists of new or modified processes, techniques,
systems and products to avoid or reduce environmental damage. Although there are a lot of variables that determine the eco-innovation
level of a firm, national and international environmental policy –as one of them- worths significantly noting. Under some conditions, the
stringency of environmental regulations induces firms to reduce their costs by innovating new environment-friendly technologies.
Therefore, environmental regulations may lead a so-called “win-win” situation characterized by both cost reducing/profit maximizing
behaviour of the firm and environmental benefits. On the other hand, international harmonization of environmental regulations may
create a comperative advantage for the eco-innovationg firms in the newly innovated technologies and strengthen this “win-win” situation.
Market structure, technological capabilities, awareness and pressures of the demanders for cleaner technology are the other variables
which determine the eco-innovation level of a firm. This study has concentrated on the variables that determine eco-innovation level of a
firm. Both endogenous and exogenous variables are analysed in detail. As a consequence, it has been found that (1) the effect of
environmental regulations on eco-innovation should be emphasized diligently, (2) international harmonization of environmental
regulations supports eco-innovation, and finally (3) increasing awareness of society about environmental issues may be influent on ecoinnovation.