Financing, Institutional Environments, and Transitions to Clean Technology

Abstract

This dissertation provides an analysis of financing and institutional environments in sustainable innovation. I argue that to understand the drivers influencing technological innovations addressing new societal values, it is useful to study variations in financing innovation and how institutional environments structuring the nature of innovation shape the linkage between financing and innovation. Theoretical developments in this dissertation focus on the interactive mechanisms between financing and institutional environments to explain the emergence of clean technology innovation in the 1990s and 2000s. I undertake three empirical studies with different levels of analysis, investigating multiple ways of how financing and institutional environments interact. My first paper shows how different nations’ financial markets and renewable energy policies contribute to the rates of renewable energy innovation and production. My second paper examines how the rise of a shareholder value orientation, as evidenced by the growth of institutional ownership, impacts clean technology innovation under various contingencies. My third paper examines the influence of bank financing and environmental institutional pressures on clean technology innovation by individuals and private firms. This dissertation contributes to the intersection of innovations, institutions, and sustainability by showing that the emergence of a new industry is embedded in the broader market and institutional dynamics and that the interactive mechanisms between financing and institutional environments fundamentally shape the fate of innovative projects designed to achieve particular social or environmental objectives.