Impact of the Pollutant Release and Transfer Register System on Firm R&D for Environmental Technology in Japan

Abstract

This paper analyzes the impact of "regulatory framework approach" of environmental policy on firms' environmental R&D activity. Focusing on the PRTR (Pollutant Release and Transfer Register) as a framework regulation approach, I examine the relationship between environmental policy and environmental R&D using the patent data. I estimate difference-in-differences (DID) of the amount and quality of environmental patent comparing the treatment firm group with PRTR obligation and the control firm group without PRTR obligation. The results indicate that the introduction of PRTR increased the number of environmental patent and claim by the firms with PRTR obligation. I find some evidence that the PRTR stimulates the firms' incentive of R&D for environmental R&D. My results show that the regulatory framework approach has the effects as not only environmental policy making firms manage the chemical emission but also technological policy encouraging firms to promote the amount and quality of environmental R&D.