Innovation in Automotive Emission Control Technologies: Government Actions and Inventive Activities

The primary aim of this investigation is to understand the impact of government regulations on innovation in the development of automotive emission control systems. Analysis of regulatory measures and a longitudinal study of patenting indicate that governmental actions in the form of “technology-forcing” standards have stimulated innovations. INTRODUCTION Innovation processes for automotive emission control technologies are particularly interesting since innovation took place under “technology-forcing” regulation, laws which impose emission standards above the technical capabilities of emission control devices at the time that laws are passed. Effectiveness of environmental regulation on technological innovation is not clearly understood (Jaffe, Newell et al., 2002). Proponents of regulation claim that greater stringency of environmental regulation provides incentives for firms to develop new and less costly ways of reducing pollutants (Jaffe and Palmer, 1997). Yet, more systematic assessments of the impact of regulation on innovation necessitate more systematic empirical evidence. This research aims to contribute to the literatures in environmental policy and management of innovation by providing empirical analyses of the effect of technology-forcing policy interventions on innovation using automotive emissions control technologies as a case. Prior studies on technology-forcing on automobile emission control technologies have typically relied on qualitative judgments by examining relationships between the introduction of new technologies by industry and the onset of regulations by government (NESCAUM, 2000). This study extends prior work by analyzing quantitatively the automobile industry’s patenting behavior in emission control technologies. This study focuses on the period from 1968 to 1998. The technologies covered for this study include not only technologies related to catalysts, first used in 1975, but also other technologies such as electronic controls, thermal management systems, and advanced engine controls with integrated catalytic converters that comprise modern automotive emission control systems. Academy of Management Conference, Best Paper Proceedings, New Orleans, 2004