Introduction

Environmental issues currently have considerable attention on the part of organizations as a result of the intensification of commercial flows since several aspects propel them into a competitive context that requires rapid innovation. For Lustosa (2003), the preservation of the environment can be considered a distinguishing factor in relation to the competition, becoming, therefore, a challenge to organizations. Dangelico and Pujari (2010) assure that green innovation is a factor to simultaneously improve three aspects of companies, namely, environmental, social, and financial performance. However, the current literature shows that the benefits arising from the adoption of green innovation by companies can still be considered by some scholars as inconclusive or even contradictory (Bernauer et al. 2007; Gauthier and Wooldridge 2012).

Many factors lead organizations to adopt sustainable practices, and one of them is environmental regulation (Lustosa 2002). Environmental policies are inserted in this context as a way of defining rules and incentives to be used by countries in order to shape the path of technological development (Jaffe et al. 2005). In addition, the type and purpose of environmental regulations drive companies’ efforts in green innovation differently and also promote different effects on their performance (Rennings and Rammer 2011), and can offset the cost of compliance generated by environmental investments (Yuan and Xiang 2018).

According to Lustosa (2002), environmental regulation is capable of influencing the development of environmental innovations. For Arenhardt et al. (2012), environmental legislation is a fundamental factor in the decision of organizations regarding the adoption of innovative practices. Aguilera-Caracuel and Ortiz-de-Mandojana (2013) ensure that green innovative companies are in contexts characterized by stricter environmental standards and higher regulatory standards. For Van Leeuwen and Mohnen (2017), the use of environmental taxes seems to be an important element in the decision-making of companies to invest in green R&D and the introduction of eco-innovations. In the same direction, Rubashkina et al. (2015) found that there is a positive impact of environmental regulation on innovation. On the other hand, other studies demonstrate a negative association between the strictness of environmental regulations and green innovation (Borghesi et al. 2015; Lanoie et al. 2011). Bernauer et al. (2007) stated that the effects of environmental regulation on innovation are still considered inconclusive and contested.

In addition to studies addressing the direct relationship between environmental regulations and green innovation, another stream of research exploring different regulatory mechanisms, such as command and control regulations and market-based regulations, is being developed to identify how and under what conditions they affect green innovation (Zhao et al. 2015; Schilke 2018; Zhang et al. 2019). Another aspect addressed in the literature refers to the mediating role of both green innovation and environmental regulations in relation to other organizational factors that affect green industrial development (Feng and Chen 2018).

It should be noted that in addition to the normative character, environmental regulation also has an informative aspect, reflecting the need for environmental protection and signaling the demands to polluters and suppliers of environmental technologies (Lustosa 2002).

In this context, considering that green innovation is a type of innovation that promotes economic development and reduces adverse effects on the environment (Polzin et al. 2016), and knowing that environmental regulations are one of the main factors that induce companies to these innovations, the present study aims to present a summary of the most relevant academic researches that relate environmental regulations and green innovation, knowing in a standardized way the scientific information of this field of study.

Although there is a growing number of researches addressing this relationship, the literature still presents inconsistencies that can be clarified through a mapping gathering information that helps both researchers in the direction of future research, as well as managers in their decision-making process.

In addition, forming an adequate understanding of relevant issues in the current context, such as environmental regulations and green innovation, helps to identify trends for the development of new studies that more efficiently promote the green growth of companies.

Research method

To identify trends and patterns in scientific production related to green innovation and environmental regulations, a systematic literature review was carried out. According to Petticrew and Roberts (2006), a systematic literature review is a technique to deal with a greater amount of information and answer questions about what works and what does not, from a practical point of view. In addition, it aims to identify, evaluate, and synthesize relevant studies in order to answer a particular question.

For Tranfield et al. (2003), the systematic review must adopt a rigorous scientific process of bibliographic research and evaluation methods, so that the search process can be easily understood and replicable. It is also noteworthy that a systematic review can be valuable since the absence of data can be highlighted, and, thus, it is possible to identify gaps and future research efforts (Petticrew and Roberts 2006; Morandi and Camargo 2015).

In this review, you can see how the integration of these themes works and what scholars have found about the relationship between green innovation and environmental regulations.

The bibliographic survey on the topic was developed based on secondary data through a systematic review, where the studies were identified using the following procedures:

(1) Iterative search for scientific articles related to green innovation and environmental regulations carried out in the Science Direct, Scopus, and Web of Science databases, limited to the period from 2011 to 2019. To obtain the data, the articles were filtered by the keywords “Green innovation and Environment regulation” and “Eco-innovation and Environment regulation.” Only articles were included in the selection, and the words searched should be in titles and abstracts. Some articles, although not showing a possible relationship between green innovation and environmental regulations, were selected because they presented content relevant to the theme and that could contribute to the discussion of this research.

(2) Categorization of the character and content of these studies, presenting the general characteristics of the articles (Table 1).

Table 1 Categorization of analyzed studies
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(3) Qualitative analysis of the content of the articles obtained, identifying the main contributions of the studies at the interface between green innovation and environmental regulation, which is the focus of this study.

After completing this step, it resulted in 79 articles that will be analyzed in the next section.

Environmental regulations and green innovation

In recent decades, governments have been concerned with the relationship between economic growth and environmental issues. This concern stems mainly from the scarcity of resources and the degradation of the environment, which causes socioeconomic problems worldwide. In order to face these problems, governments began to define rules and incentives, also called environmental regulations, which are used by several countries. Cleff and Rennings (1999) defined environmental regulation as the pressure effect of government policies. Frondel et al. (2007) pointed out that environmental regulation is a tool for government environmental policies and is also an important driving force for ecological innovation. Wang et al. (2016) considered environmental regulation a kind of traditional tool to solve environmental problems. For Liao (2018), environmental regulations, in a broad sense, must be a comprehensive system, which is composed of laws, regulations, industry standards, suggestions, supervision, punishments, rewards, environmental protection advertising, education, and other means adopted by various subjects to provide feedback on various aspects of environmental problems.

With the complexity of environmental policy systems and the diversity of tools, some authors have classified environmental regulation into three types of instruments: command and control instruments (they establish laws and regulations that require polluters to reduce emissions); market-based instruments (aimed at encouraging polluters to reduce pollution emissions); and voluntary regulatory instruments (provides incentives for pollution control) (Gunningham et al. 1998; Huang et al. 2016; Ren et al. 2018).

According to Mickwitz (2003), environmental policy instruments are measures taken by governments to address air, water, solid waste, and the depletion of natural resources and to achieve environmental governance. These regulatory instruments have been analyzed by several authors, as their use is not standardized, and they are adapted for each type of environmental problem and for each type of region.

Margulis (1996) addressed the lessons learned from the implementation of environmental regulation in several developing countries and concluded that copying the legislation of OECD countries is not enough and is often unproductive, as policies and instruments must adapt to local socioeconomic and cultural conditions to environmental conditions. Kathuria (2007) analyzed the effect of informal environmental regulation on controlling the discharge of pollutants in India and found that external pressures represented by environmental news reports play a positive role in controlling companies’ pollution. Arimura et al. (2008) found that voluntary regulation is effective in reducing the discharge of pollutants. Zhao et al. (2015) empirically investigated the impacts of three different environmental regulations on production efficiency and CO2 emissions and found that market-based regulations have significant impacts on improving efficiency and reducing CO2. Ren et al. (2018) analyzed the effect of the three types of environmental regulation on eco-efficiency in different regions of China and found that the impact of regulations is different for each type of region, so the tools must be adjusted according to the needs of each region.

Besides considering regional differences in the implementation of environmental regulations, companies also play a key role in this process. Liberalization of trade and investment encourages more efficient use of resources globally, especially if institutional and political strategies that value environmental issues are implemented. Also, globalization encourages the expansion of markets and competitiveness, motivating the business world to adapt and innovate.

In addition, the requirement of governments with strict environmental policies can also influence the competitiveness of countries and encourage companies to invest in green innovation. Authors such as Cleff and Rennings (1999) and Frondel et al. (2008) have suggested that stricter environmental regulations drive companies to promote green innovation and these differences in regulatory rigor occur in countries with different levels of development in their eco-innovation capabilities.

Although there are divergences and inconclusions regarding the findings of the literature, environmental regulations are considered an antecedent of green innovation in several researches. Thus, discussing its advantages and disadvantages in this context is beneficial. Porter and Van der Linde (1999) already argued the relationship between environmental adequacy and competitiveness, since, for the authors, there is no impasse between ecology and economics. Like Barbieri (2011), the authors consider that sustainable development is a strategic tool for organizations as they contribute to increasing productivity and competitiveness. Barbieri (2011) also asserts that there must be proactive and anticipatory actions.

If reducing the environmental impact as a result of complying with environmental regulations can be an evident factor, it is also noteworthy that the organization starts to present a sustainable image before its stakeholders, contributing, also, to the formation of environmental awareness of consumption and appreciation of its brand, creating a greater reputation and better image with society (Forsman 2013; Santin 2007), which, according to Martín-Tapia et al. (2010), can favor the international insertion of business. Santin (2007) also points out that adapting to environmental legislation avoids the payment of fines and other penalties by the company.

On the other hand, the adoption of the triple bottom line, which involves social, financial, and environmental perspectives, by companies is not simple and adapting to this new dynamic requires that the adopted strategies be rethought, which also means that the need for high investments can become a difficulty. According to Barbieri (2011), the adoption of the strategy also results from leveraging opportunities and mitigating threats in the market, which can be substantially complex.Thus, because of the importance of environmental regulations as a relevant factor that interferes in some way in the green innovation of companies, studies that establish this relationship will be addressed in the next topic. However, it is emphasized that the survey is concentrated in studies in which collaboration is inserted in the context of environmental regulations as an antecedent of green innovation.

Systematic literature review: Green innovation and environmental regulations

In the survey carried out, it was found that there are not many studies on the topic considering the total set of published articles. Although some articles had the words searched, the studies were not adapted to the objectives proposed in this work. Despite this, it can be seen that between 2015 and 2016, the production on the topic had considerable growth compared to previous years. In contrast, in recent years (2017–2019), there has been a decrease in production (Fig. 1).

Fig. 1
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Distribution of papers published by year. Source: Prepared by the authors

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Table 2 presents a summary of the journals and their classification in the Qualis list, their impact factor (JCR—Journal Citation Reports), the area of these journals, and the number of articles selected. Qualis is the set of procedures used by CAPES (Coordination for the Improvement of Higher Education Personnel) to stratify the quality of intellectual production in graduate programs in Brazil. This process was designed to meet the specific needs of the evaluation system and is based on the information provided through the “CAPES Data Collection” application. As a result, it provides a list of the classification of journals.

Table 2 Survey of papers
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The impact factor (JCR) is one of the most legitimate indicators in the international scientific community, published by Thomson Reuters, and its purpose is to quantitatively assess the relevance of a given scientific journal in its respective area.

It is observed that the 93 selected articles are distributed in 31 different journals, most of them with A1 classification in the Qualis list and in the area of administration, accounting, and tourism, which demonstrate the relevance of the research theme (Figs. 2 and 3).

Fig. 2
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Estrato qualis. Source: Prepared by the authors

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Fig. 3
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Area of publication. Source: Prepared by the authors

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About 92% of these 93 articles were published in journals with Qualis A1 classification, and the journals with the largest number of publications were the Journal Cleaner of Production (31 articles); Ecological Economics (8 articles); and Technological Forecasting & Social Change (6 articles)—all of them with Qualis A1 classification in the area of administration, accounting, and tourism and with JCR greater than 2.

Regarding the methodology used in the studies, it is noted that most of the articles analyzed had a quantitative approach and used multivariate analysis through regression. Regarding qualitative studies, only a few studies use this approach. Furthermore, most of those who use it apply the case study through interviews (Fig. 4).

Fig. 4
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Research methodology. Source: Prepared by the authors

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Another important information about the analyzed studies is the origin of the samples, which were separated into DC, developed countries; EC, emerging countries; DC and EC; and NA—not applicable (Fig. 5). It appears that 33 articles are from DC and 31 articles from EC, and most studies with samples from China. It is also noticed that only 9 articles address both DC and EC companies, demonstrating a gap for research that uses samples from both regions.

Fig. 5
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Origin of the analyzed studies. Source: Prepared by the authors

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Finally, the studies were analyzed in terms of addressing the relationship between environmental regulations and green innovation. The contributions of these surveys will be explained as follows: (a) positive relationship between environmental regulations and green innovation; (b) negative relationship between environmental regulations and green innovation; and (c) studies where this relationship does not apply, that is, the studies do not address a direct relationship between environmental regulations and green innovation; however, it was considered relevant for the discussion of the theme (Table 3).

Table 3 Studies on environmental regulations and green innovation
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Results and discussions

Among studies that found a positive relationship between environmental regulations and green innovation, many sought to explore and identify the determining factors, drivers, background, and origins of green innovation in companies in different countries (Belin et al. 2011; Horback et al. 2012; Doran and Ryan 2012; Cai and Zhou 2014; Li 2014; Zailani et al. 2015; Dangelico 2016; Li and Hamblin 2016; Doran and Ryan 2016).

In this search, Belin et al. (2011) tried to recognize the international determinants and regional characteristics of eco-innovations in industries in France and Germany and they confirmed the central role of regulations and cost savings as drivers of eco-innovation. Horback et al. (2012) tested whether different types of eco-innovation are driven by different factors in industries in Germany, and they found that the current regulation is important for leading companies to invest in reducing gas emissions, water or noise emissions and to avoid dangerous substances and increase product recycling. Doran and Ryan (2012) analyzed the drivers of eco-innovation and their impact on performance in Irish companies and pointed that regulation and customer perception can explain the company’s decision to engage in green innovation.

Similarly, Cai and Zhou (2014) empirically investigated the main factors that influence the adoption of green innovation in Chinese companies and revealed that the external pressures of environmental regulations and the green demands of customers and competitors affect the green innovation of companies. Corroborating these results, Li (2014) examined the relationships between institutional pressures, environmental innovation practices and industrial performance in China. The results revealed that institutional pressures from government command and control instruments, the pressure of customers abroad, and the pressure of competition have a positive impact on environmental innovation practices, as an instrument of economic incentive by the government, and that pressures from internal customers do not affect environmental innovation practices.

Zailani et al. (2015) also investigated the determinants of the adoption of green innovation and its effects on the performance of Malaysian automotive industries. The results showed that environmental regulations, the market demand, and the companies’ internal initiatives are the main factors that positively affect the adoption of green innovation. Dangelico (2016), through a systematic literature review, sought to identify the background, the results, and the success factors of the development of green products. As a result, he found that many external and internal factors drive the development of green products, and among the external factors, the most important are environmental regulations and market demand.

Other research that also showed a positive relationship between environmental regulations and green innovation sought to analyze the impact of environmental policies on green innovation (Johnstone et al. 2012; Bergek and Berggren, 2014; Lin et al. 2014; Rubashkina et al. 2015; Zhao et al. 2015; Chan et al. 2016; Stucki and Woerter 2016; Huang et al. 2016; Chakraborty and Chatterjee 2017; Ren et al. 2018; Pan et al. 2019; Borsatto and Amui 2019).

Johnstone et al. (2012) used patent data to examine the impact of environmental policies on innovations in environmental technology in 77 countries and confirmed that greater rigidity in environmental policies has a positive effect on environmental innovation. Aguilera-Caracuel and Ortiz-de-Mandojana (2013) demonstrated that green innovative companies are situated in contexts characterized by stricter environmental standards and higher environmental normative levels than non-green innovative companies.

Bergek and Berggren (2014) analyzed, through empirical studies, the impact of policy instruments from two high-emission sectors in the USA on innovation and found that politics plays a fundamental role in the development and diffusion of innovation in the sectors studied. Rubashkina et al. (2015) investigated the impact of environmental regulation on the economic performance of industries in European countries and found evidence of the positive impact of environmental regulation on the departure of innovation activities such as patents. Zhao et al. (2015) demonstrated that environmental regulations promote a change in the behavior of companies towards green development and also increase the competitiveness of companies.

Chan et al. (2016) examined the effect of green product innovation on the relationship between pressure from environmental regulations and the performance of 250 Chinese companies. They demonstrated that pressure from environmental regulation has a positive impact on green product innovation, which influences the company’s efficiency and profitability. Huang et al. (2016) created a conceptual model based on institutional theory and a resource-based view to explore the effects of regulatory and customer pressure on the performance of green innovation through green organizational responses. The modeling results showed that regulatory and customer pressure promotes green organizational responses and improves the performance of green innovation.

The study by Ramanathan et al. (2017) found that depending on the resources and capabilities of companies, those that take a more dynamic approach to respond to environmental regulations in an innovative way and adopt a proactive approach to manage their performance generally are more prepared to get the benefits of sustainability.

Chakraborty and Chatterjee (2017) analyzed the effect of German international regulation on innovation activities by upstream dye manufacturers in India and found robust evidence of a significant increase in innovation spending for dye manufacturers. Ren et al. (2018) tested the effects of the three types of environmental regulations on eco-efficiency in three regions of China and revealed that for each region, the types of regulations impact eco-efficiency in different ways, with a positive impact or without significant impact.

Pan et al. (2019) studied the dynamic internal relationship between environmental regulation, technological innovation, and energy efficiency in China and pointed three findings: (i) the environmental regulation of market incentives contributes directly to energy efficiency; (ii) the environmental regulation of market incentives drives energy efficiency through technological innovation: and (iii) the environmental regulation of command control directly contributes to energy efficiency.

Finally, the study by Borsatto and Amui (2019) analyzed how the degree of severity of environmental regulations and the international competitiveness of countries affects the green innovation efforts of companies in the industrial sector in developed and developing countries. The results showed that among the antecedents of green innovation analyzed, the rigor of environmental regulations in the countries and the size of companies had a positive impact on green innovation efforts. The results also showed that the relationship between environmental regulation and green innovation is moderated positively by the size of the companies and negatively moderated by the degree of internationalization.

From these studies, it can be seen that, regardless of the region of origin of the analyzed industries, environmental regulations proved to be one of the main factors that motivate companies to invest in green innovation, and that different types of environmental regulations can impact the green development of companies in different ways as well.

On the other hand, many researchers found a negative relationship between environmental regulations and green innovation. Love et al. (2012) presented a case study from Australia describing how a client acted as a catalyst to drive the sustainability agenda and demonstrated that existing construction regulations and a lack of government incentives were identified as the main barriers to the implementation of sustainable technologies. Cainelli and Mazzanti (2013) investigated the relevant factors behind green innovation in Italian service companies and found that the transfer of environmental regulations from industries to service companies does not positively affect the diffusion of environmental innovations in these companies.

Triguero et al. (2014) examined the influence of energy prices on different environmental practices of different European SMEs and pointed that neither existing nor future environmental regulations have a significant impact on innovative and friendly practices to the environment.

Guo et al. (2017) developed an integrated model to investigate the relationship between environmental regulation, technological innovation, and regional green growth performance considering 30 provincial administrative regions in China. The results show that environmental regulation has a significant negative effect on regional green growth performance. However, it was found that environmental regulation positively influences technological innovation and technological innovation has a positive impact on regional green growth performance.

In addition to these two approaches to the positive and negative relationship between environmental regulations and green innovation, in the survey of articles, studies were found that address environmental regulations without making a direct relationship with green innovation, considering it as a moderating factor in relation to other factors organizational changes that could affect companies’ environmental and financial performance.

Mazon et al. (2012) verified how environmental regulations related to electronic waste in Brazil mobilize heterogeneous networks (academia, private companies, and government) for the generation and diffusion of innovation to comply with these regulations. They found that the development of developed and developing countries has different levels of technology development and legislation on electronic waste, but international regulation affects the competitiveness of its electronic industry equally.

Fiott (2014) evaluated how and why elements of the European defense sector became involved in ecology and found that Europe’s military, defense institutions, and defense companies have a strong interest in greening and tend to delegate innovation market in an increasingly regulated context. Souto and Rodriguez (2015) demonstrated that the obstacles faced by Spanish companies involved in green innovation are greater and different from those faced by other companies, which requires different action plans that include public funding and cooperation.

Li and Hamblin (2016) revealed that companies that have ISO14001 certification are probably one step ahead, but this is not the only factor that leads these manufacturing companies to be active in cleaner production—green process innovations and a culture environment has a greater influence in promoting cleaner production. Blohmke et al. (2016) examined the determinants of environmental policy in 47 countries and found that green defense and governance capacity are the main structural determinants of the quality of environmental regulation and that access to the Internet also has a positive influence on the environmental regulation through the defense and green governance.

Dong et al. (2019) demonstrated that clean and unclean technologies have a strong effect on environmental quality. Unclean technology can improve environmental quality by promoting energy efficiency and the environmental benefits of clean technology include increasing new vehicles energetic. However, it is difficult for clean technology to replace unclean technology as a dominant technological application. Furthermore, subsidies to research and development can change the technological direction to affect environmental quality.

For two years, Aalbers et al. (2019) researched, through a case study, the factors that determine the success or failure of initiatives taken by companies, citizens, or municipalities for green space in urban regions in the Netherlands. The authors identify that the initiatives lead to a broader meaning and the involvement of more actors around green spaces. In addition, they integrate green space with social and economic development.

As a summary of what was exposed, it is observed that studies on environmental regulations and green innovation do not come to a consensus, despite having mostly positive results, confirming that environmental regulations are among the main external factors that induce companies to environmental innovation (Liao 2018). Another aspect to be considered is related to the division of regulations into different mechanisms such as command and control regulation and market-based regulation. New studies are emerging analyzing the effect of these different environmental policy instruments on companies’ green innovation, trying to explain the divergences in research that did not give a clear answer to this relationship (Zhang et al. 2018; Hojnik and Ruzzier 2016; Ren et al. 2018; Liao 2018; Feng & Chen 2018; Zhang et al. 2019). In addition, it appears that the studies still focus on an analysis or DP or PED, without the concern of a comparative approach in view of the different context of the rigorous regulations of these countries.

Conclusions

The present study aimed to present a summary of the most relevant academic researches that relate environmental regulations and green innovation, knowing in a standardized way the scientific information of this field of study. It is believed that studies with this approach contribute to map the knowledge on the topic, assisting professionals and researchers in gathering information for decision-making and to direct future research on the topic.

It is considered that the study fulfilled the proposed objective by analyzing 93 academic articles and presenting contributions for forming a research agenda that contributes to the advancement of discussions in this area based on future work. It was found that although most studies have shown a positive relationship between environmental regulations and green innovation, there are still inconsistencies in the literature, giving rise to research opportunities to explore how and under what conditions this relationship is established, considering the different environmental policy mechanisms and different approaches to green innovation in companies.

It was also found that most studies used quantitative methods mainly regression models for data analysis, identifying a gap for the development of qualitative research that addresses organizational aspects of behavior and management that can influence the relationship between environmental regulations and green corporate innovation.

With regard to the sample of studies, there was a need for research that carries out a comparison between countries in different contexts, that is, a comparison between developed and developing countries, as environmental regulations may present divergences both in rigor, in type and regional differences. In addition, research that addresses developing countries largely uses China and its industries as a sample, so a study that uses other developing countries is necessary considering that China, although is a developing country, has a high representation on the world stage, being the second largest economy in the world.

A limitation to be considered in this research is the selection of articles. As the focus of the study was to address the relationship between environmental regulations and companies’ green innovation, many studies on environmental regulations analyze the impacts of environmental policies on the development and green growth of regions, which is not the focus of this review. Another limitation of the study refers to the analysis of academic articles in journals of only three bases, in addition to delimiting the research of the works to the expressions “Green innovation and Enviroment regulation” and “Eco-innovation and Enviroment regulation” and for the period from 2011 to 2019.