Green Innovation in the Automotive Industry : The Effect of Regulations

Abstract: Introduction – The scene for this thesis is set in the highly regulated automotive industry. Recent scandals in the automotive industry have shown that companies have manipulated their emission results in order to pass regulations. The regulations are from the beginning implemented to protect the environment and encourage companies to develop green innovation but the authors question if regulations puts more pressure on the companies than they can handle. Therefore, the purpose of this thesis is to investigate how regulations affect green innovation. Method – The authors adopted a pragmatist research philosophy and used an abductive research method. The empirical data has been gathered through a qualitative study, conducting semi structured interviews with companies within the automotive industry. The abductive research approach meant that the frame of reference has been updated and revised when new data, which was previously not covered in the theory, was gained from the interviews. With a five-step process the authors have analyzed the empirical data with the frame of references and from the result drawn conclusion. Conclusion – The conclusions drawn in this thesis is that regulations have a positive impact on companies green incremental innovation and can have both an inhibitory and a positive effect on radical green innovation. However, there are few underlying factors affecting the outcome such as infrastructure, technology neutrality and communication. Contribution – The contribution of this thesis has added new qualitative knowledge to the research field on how regulations affect green innovation. By localizing and highlighting the factors found in the conclusion, companies and policy makers can cooperate to enhance the development of green radical innovations in the future. Future research - Future researcher are encouraged to investigate how infrastructure, technology neutrality and communication each are affecting green radical innovation. Key words: Green innovation, Regulations, Government policy and the Automotive Industry Paper type: Master thesis