Explaining adoption of end of pipe solutions and clean technologies—Determinants of firms’ investments for reducing emissions to air in four sectors in Sweden

We estimate firms’ probability of technological adoption based on a firm level panel data set from four major sectors in Sweden between 2000 and 2003. Technological adoption is measured by environmental protection investments (EPI), and we focus particularly on differences between the decisions to adopt end of pipe solutions and clean technologies. We find that there seem to be different drivers for investments in end of pipe solutions and clean technologies, in particular we show that the probability of a firm investing in clean technologies to reduce emissions to air increases if the firm has expenditures for R&D related to environmental protection (green R&D), while price on energy is important for the investment in end of pipe solutions. Furthermore, our results indicate complementarity between the two types of technologies.