Technical Report Product-Related Environmental Regulation, Innovation, and Competitiveness : Empirical Evidence from Malaysian and Vietnamese Firms

Otsuki, Tsunehiro  ,  Yang, Qizhong

DP-2017-E-007pp.1 - 37 , 2017-11-10 , Osaka School of International Public Policy
This study examined the impact of two PRERs released by the EU — RoHS and REACH — on Malaysian and Vietnamese firms’compliance. The analysis considers productivity as a realization of innovations and examines the R&D enhancement effect of PRERs. The effect of PRERs on productivity is also broken down into direct and indirect effects through R&D enhancement. The result shows that the response to REACH can create incentives to advance R&D, and productivity can increase through both direct and indirect channels. No relationship between the response to RoHS and R&D expenditure is found. Further analysis shows that firms comply with RoHS and REACH in different ways, but just the ability to continue exporting to the EU motivates compliance.

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