Green innovations and organisational change: making better use of environmental technology

The literature on within-firm organizational change and productivity suggests that firms can make more efficient use of certain technologies if complementary forms of organization are adopted. This issue may be of even greater importance for the case of greenhouse gas (GHG) abatement technologies imposed by public authority as to reduce social costs of climate change while they are not necessarily expected to increase private returns. Previous research, however, has largely neglected this aspect. Using German firm-level data, we find that organizational change increases the returns to the use of CO2 reducing technologies and that joint adoption leads to higher productivity. Without having introduced complementary organizational innovations, the adoption of CO2 reducing technologies is associated with lower productivity.